The hematological malignancies classified as mixed lineage leukemias (MLL) harbor fusions of the MLL1 gene to partners that are members of transcriptional elongation complexes. MLL-rearranged leukemias are associated with extremely poor prognosis, and response to conventional therapies and efforts to identify molecular targets are urgently needed. Using mouse models of MLL-rearranged acute myeloid leukemia, here we show that genetic inactivation or small-molecule inhibition of the protein arginine methyltransferase PRMT5 exhibit anti-tumoral activity in MLL-fusion protein-driven transformation. Genome-wide transcriptional analysis revealed that inhibition of PRMT5 methyltransferase activity overrides the differentiation block in leukemia cells without affecting the expression of MLL-fusion direct oncogenic targets. Furthermore, we find that this differentiation block is mediated by transcriptional silencing of the cyclin-dependent kinase inhibitor p21 (CDKN1a) gene in leukemia cells. Our study provides pre-clinical rationale for targeting PRMT5 using small-molecule inhibitors in the treatment of leukemias harboring MLL rearrangements.