Hematological malignancies are characterised by a block in differentiation, which in many cases is caused by recurrent mutations affecting the activity of hematopoietic transcription factors. RUNX1-EVI1 is a fusion protein formed by the t(3;21) translocation linking two transcription factors required for normal hematopoiesis. RUNX1-EVI1 expression is found in myelodysplastic syndrome, secondary acute myeloid leukemia, and blast crisis of chronic myeloid leukemia; with clinical outcomes being worse than in patients with RUNX1-ETO, RUNX1 or EVI1 mutations alone. RUNX1-EVI1 is usually found as a secondary mutation, therefore the molecular mechanisms underlying how RUNX1-EVI1 alone contributes to poor prognosis are unknown. To address this question, we induced expression of RUNX1-EVI1 in hematopoietic cells derived from an embryonic stem cell differentiation model. Induction resulted in disruption of the RUNX1-dependent endothelial-hematopoietic transition, blocked the cell cycle and undermined cell fate decisions in multipotent hematopoietic progenitor cells. Integrative analyses of gene expression with chromatin and transcription factor binding data demonstrated that RUNX1-EVI1 binding caused the re-distribution of endogenous RUNX1 within the genome and interfered with both RUNX1 and EVI1 regulated gene expression programs. In summary, RUNX1-EVI1 expression alone leads to extensive epigenetic reprogramming which is incompatible with healthy blood production.