In a screen for Drosophila genes that interfere with transcriptional repression mediated by the Polycomb group of genes, we identified a dominant mutation affecting the Alhambra (Alh) gene, the fly homologue of the human AF10 gene. AF10 has been identified as a fusion partner of both MLL and CALM in infant leukemias. Both fusion proteins retain the leucine zipper domain of AF10 but not its PHD domain. We show here that, while the full-length ALH protein has no activity on Polycomb group-responsive elements (PREs), overexpression of the isolated ALH leucine zipper domain activates several PREs. Within the ALH full-length protein, the PHD domain inhibits the PRE deregulation mediated by the leucine zipper domain. This deregulation is conserved in the human AF10 leucine zipper domain, which confers the same activity on an oncogenic MLL-AF10 fusion protein expressed in Drosophila melanogaster. These data reveal new properties for the leucine zipper domain and thus might provide new clues to understanding the mechanisms by which AF10 fusion proteins in which the PHD domain is lost might trigger leukemias in humans.