Plasmacytoid dendritic cells (pDC) are the principal natural type I interferon producing dendritic cells. Neoplastic expansion of pDCs and pDC precursors leads to blastic plasmacytoid dendritic cell neoplasm (BPDCN) and clonal expansion of mature pDCs has been described in chronic myelomonocytic leukemia (CMML). The role of pDC expansion in acute myeloid leukemia (AML) is poorly studied. Here we characterize AML patients with pDC expansion (pDC-AML), which we observe in approximately 5% of AML. pDC-AML often possess cross-lineage antigen expression and have adverse risk stratification with poor outcome. RUNX1 mutations are the most common somatic alterations in pDC-AML (>70%) and are much more common than in AML without pDC expansion and BPDCN. We demonstrate that pDCs are clonally related to, and originate from, leukemic blasts in pDC-AML. We further demonstrate that leukemic blasts from RUNX1-mutated AML upregulate a pDC transcriptional program, poising the cells towards pDC differentiation and expansion. Finally, tagraxofusp, a targeted therapy directed to CD123, reduces leukemic burden and eliminates pDCs in a patient-derived xenograft model. In conclusion, pDC-AML is characterized by a high frequency of RUNX1 mutations and increased expression of a pDC transcriptional program. CD123 targeting represents a potential treatment approach for pDC-AML.Copyright © 2020 American Society of Hematology.