Effective regimens are needed for children with relapsed acute myeloid leukemia (AML). AAML1421 is a phase I/II study of CPX-351, a liposomal preparation of daunorubicin and cytarabine. AAML1421 sought to determine the recommended phase II dose (RP2D) of CPX-351 and the response rate after up to 2 cycles of therapy.Children > 1 and ≤ 21 years of age with relapsed/refractory AML were eligible for dose finding; those in first relapse were eligible for the efficacy phase. Dose-limiting toxicity (DLT) assessment occurred during cycle 1. Two cycles of therapy were offered (cycle 1: CPX-351; cycle 2: FLAG [fludarabine 30 mg/m2/dose on days 1-5; cytarabine 2,000 mg/m2/dose on days 1-5; and granulocyte-colony stimulating factor 5 µg/kg/dose, days 1-5 and day 15 through absolute neutrophil count > 500/µL]). Response was assessed after each cycle.Thirty-eight patients enrolled: 6 in the dose-finding phase and 32 in the efficacy phase. During dose finding, 1/6 patients experienced a DLT (grade 3 decrease in ejection fraction). The RP2D was 135 units/m2 on days 1, 3, and 5. Toxicities of grade ≥ 3 during cycle 1 included fever/neutropenia (45%), infection (47%), and rash (40%). There was no toxic mortality. Best responses included 20 complete response (CR; 54%), 5 CR with partial recovery of platelet count (CRp; 14%), and 5 CR with incomplete blood count recovery (14%). Twenty-one of 25 with CR/CRp had no detectable residual disease (RD; 84%) by flow cytometry. Hematopoietic stem cell transplantation (HSCT) was used as consolidation in 29/30 responders (96.7%); 20/25 (80%) had no RD before HSCT.The RP2D of CPX-351 is 135 units/m2/dose on days 1, 3, and 5. Toxicity was manageable, and protocol therapy was effective. Response rates are superior to prior published North American cooperative group clinical trials for children with AML in first relapse.