DNA methylation patterns are frequently deregulated in t(8; 21) acute myeloid leukaemia (AML), but little is known of the mechanisms by which specific gene sets become aberrantly methylated. Here, we found that the promoter DNA methylation signature of t(8; 21)(+) AML blasts differs from that of t(8; 21)(-) AMLs. This study demonstrated that a novel hypermethylated zinc finger-containing protein, THAP10, is a target gene and can be epigenetically suppressed by AML1-ETO at the transcriptional level in t(8; 21) AML. Our findings also show that THAP10 is a bona fide target of miR-383 that can be epigenetically activated by the AML1-ETO recruiting co-activator p300. In this study, we demonstrated that epigenetic suppression of THAP10 is the mechanistic link between AML1-ETO fusion proteins and tyrosine kinase cascades. In addition, we showed that THAP10 is a nuclear protein that inhibits myeloid proliferation and promotes differentiation both in vitro and in vivo. Altogether, our results revealed an unexpected and important epigenetic mini-circuit of AML1-ETO/THAP10/miR-383 in t(8; 21) AML, in which epigenetic suppression of THAP10 predicts a poor clinical outcome and represents a novel therapeutic target.