Acute myeloid leukemia (AML) is characterized by recurrent chromosomal rearrangements that encode for fusion proteins which drive leukemia initiation and maintenance. The inv(16) (p13q22) rearrangement is a founding mutation and the associated CBFbeta-SMMHC fusion protein is essential for the survival of inv(16) AML cells. This Chapter will discuss our understanding of the function of this fusion protein in disrupting hematopoietic homeostasis and creating pre-leukemic blasts, in its cooperation with other co-occurring mutations during leukemia initiation, and in leukemia maintenance. In addition, this chapter will discuss the current approaches used for the treatment of inv(16) AML and the recent development of AI-10-49, a selective targeted inhibitor of CBFbeta-SMMHC/RUNX1 binding, the first candidate targeted therapy for inv(16) AML.