In CBFbeta-SMMHC, core binding factor beta (CBFbeta) is fused to the alpha-helical rod domain of smooth muscle myosin heavy chain (SMMHC). We generated Ba/F3 hematopoietic cells expressing a CBFbeta-SMMHC variant lacking 28 amino acids homologous to the assembly competence domain (ACD) required for multimerization of skeletal muscle myosin. CBFbeta-SMMHC(DeltaACD) multimerized less effectively than either wild-type protein or a variant lacking a different 28-residue segment. In contrast to the control proteins, the DeltaACD mutant did not inhibit CBF DNA binding, AML1-mediated reporter activation, or G(1) to S cell cycle progression, the last being dependent upon activation of CBF-regulated genes. We also linked the CBFbeta domain to 149 or 83 C-terminal CBFbeta-SMMHC residues, retaining 86 or 20 amino acids N-terminal to the ACD. CBFbeta-SMMHC(149C) multimerized and slowed Ba/F3 proliferation, whereas CBFbeta-SMMHC(83C) did not. The majority of CBFbeta-SMMHC and CBFbeta-SMMHC(149C) was detected in the nucleus, whereas the DeltaACD and 83C variants were predominantly cytoplasmic, indicating that multimerization facilitates nuclear retention of CBFbeta-SMMHC. When linked to the simian virus 40 nuclear localization signal (NLS), a significant fraction of CBFbeta-SMMHC(DeltaACD) entered the nucleus but only mildly inhibited CBF activities. As NLS-CBFbeta-SMMHC(83C) remained cytoplasmic, we directed the ACD to CBF target genes by linking it to the AML1 DNA binding domain or to full-length AML1. These AML1-ACD fusion proteins did not affect Ba/F3 proliferation, in contrast to AML1-ETO, which markedly slowed G(1) to S progression dependent upon the integrity of its DNA-binding domain. Thus, the ACD facilitates inhibition of CBF by mediating multimerization of CBFbeta-SMMHC in the nucleus. Therapeutics targeting the ACD may be effective in acute myeloid leukemia cases associated with CBFbeta-SMMHC expression.