Loss-of-function mutations in hematopoietic transcription factors including PAX5 occur in most cases of B-progenitor acute lymphoblastic leukemia (B-ALL), a disease characterized by the accumulation of undifferentiated lymphoblasts. Although PAX5 mutation is a critical driver of B-ALL development in mice and humans, it remains unclear how its loss contributes to leukemogenesis and whether ongoing PAX5 deficiency is required for B-ALL maintenance. Here we used transgenic RNAi to reversibly suppress endogenous Pax5 expression in the hematopoietic compartment of mice, which cooperates with activated signal transducer and activator of transcription 5 (STAT5) to induce B-ALL. In this model, restoring endogenous Pax5 expression in established B-ALL triggers immunophenotypic maturation and durable disease remission by engaging a transcriptional program reminiscent of normal B-cell differentiation. Notably, even brief Pax5 restoration in B-ALL cells causes rapid cell cycle exit and disables their leukemia-initiating capacity. These and similar findings in human B-ALL cell lines establish that Pax5 hypomorphism promotes B-ALL self-renewal by impairing a differentiation program that can be re-engaged despite the presence of additional oncogenic lesions. Our results establish a causal relationship between the hallmark genetic and phenotypic features of B-ALL and suggest that engaging the latent differentiation potential of B-ALL cells may provide new therapeutic entry points.