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Histone methyltransferases are epigenetic regulators that modify key lysine and arginine residues on histones and are believed to play an important role in cancer development and maintenance. These epigenetic modifications are potentially reversible and as a result this class of enzymes has drawn great interest as potential therapeutic targets of small molecule inhibitors. Previous studies have suggested that the histone lysine methyltransferase G9a (EHMT2) is required to perpetuate malignant phenotypes through multiple mechanisms in a variety of cancer types. To further elucidate the enzymatic role of G9a in cancer, we describe herein the biological activities of a novel peptide-competitive histone methyltransferase inhibitor, A-366, that selectively inhibits G9a and the closely related GLP (EHMT1), but not other histone methyltransferases. A-366 has significantly less cytotoxic effects on the growth of tumor cell lines compared to other known G9a/GLP small molecule inhibitors despite equivalent cellular activity on methylation of H3K9me2. Additionally, the selectivity profile of A-366 has aided in the discovery of a potentially important role for G9a/GLP in maintenance of leukemia. Treatment of various leukemia cell lines in vitro resulted in marked differentiation and morphological changes of these tumor cell lines. Furthermore, treatment of a flank xenograft leukemia model with A-366 resulted in growth inhibition in vivo consistent with the profile of H3K9me2 reduction observed. In summary, A-366 is a novel and highly selective inhibitor of G9a/GLP that has enabled the discovery of a role for G9a/GLP enzymatic activity in the growth and differentiation status of leukemia cells.