Acute myeloid leukemia (AML) is an aggressive blood cancer with poor prognosis. FMS-like tyrosine kinase receptor-3 (FLT3) is one of the major oncogenic receptor tyrosine kinases aberrantly activated in AML. Although protein tyrosine phosphatase PRL2 is highly expressed in some subtypes of AML compared with normal human hematopoietic stem and progenitor cells, the mechanisms by which PRL2 promotes leukemogenesis are largely unknown. We discovered that genetic and pharmacological inhibition of PRL2 significantly reduce the burden of FLT3-internal tandem duplications–driven leukemia and extend the survival of leukemic mice. Furthermore, we found that PRL2 enhances oncogenic FLT3 signaling in leukemia cells, promoting their proliferation and survival. Mechanistically, PRL2 dephosphorylates the E3 ubiquitin ligase CBL at tyrosine 371 and attenuates CBL-mediated ubiquitination and degradation of FLT3, leading to enhanced FLT3 signaling in leukemia cells. Thus, our study reveals that PRL2 enhances oncogenic FLT3 signaling in leukemia cells through dephosphorylation of CBL and will likely establish PRL2 as a novel druggable target for AML.