Tumours are composed of phenotypically heterogeneous cancer cells that often resemble diverse differentiation states of their lineage of origin. Within this hierarchy it is thought that an immature subpopulation of tumor-propagating cancer stem cells (CSCs) differentiates into non-tumourigenic progeny, providing rationale for therapeutic strategies that specifically eradicate CSCs or induce their differentiation. The clinical success of these approaches depends on CSC differentiation being unidirectional rather than reversible, yet this question remains unresolved even in prototypically hierarchical malignancies such as acute myeloid leukaemia (AML). To examine this we have developed a novel mouse AML model driven by reversible RNAi-mediated knockdown of the ETS family transcription factory PU.1 (SPI1). The essential myeloid differentiation functions of PU.1 are compromised in several AML subtypes, including direct inhibition by the recurrent fusion oncoproteins AML1-ETO and PML-RARA. We find that restoring endogenous PU.1 activity in AML in vivo triggers global transcriptional remodeling, immunophenotypic and morphological maturation, and sustained disease remission. Unexpectedly, subsequent PU.1 suppression in mature, AML-derived, neutrophil-like cells reverses the differentiation-associated epigenetic and transcriptional program and allows clonal reversion to an immature leukaemogenic state within days. Additionally, using human acute promyelocytic leukaemia (APL) primary samples and cell lines along with an in vivo mouse APL model, we show that leukaemia cells differentiated by retinoic acid therapy can revert to an immature, clonogenic, and leukaemogenic state upon treatment cessation. These results demonstrate that leukaemia-initiating activity is not restricted to immature cells, but can be re-acquired by mature tumour cells through de-differentiation. Maturation state plasticity may contribute to leukaemia progression and post-therapy relapse, highlighting the importance of eradicating all tumour cells regardless of differentiation stage.