Deletions of chromosome 5q are associated with poor outcomes in acute myeloid leukemia (AML) suggesting the presence of tumor suppressor(s) at the locus. However, definitive identification of putative tumor suppressor genes remains controversial. Here we show that a 106-nucleotide noncoding RNA vault RNA2-1 (vtRNA2-1), previously misannotated as miR886, could potentially play a role in the biology and prognosis of AML. vtRNA2-1 is transcribed by polymerase III and is monoallelically methylated in 75% of healthy individuals whereas the remaining 25% of the population have biallelic hypomethylation. AML patients without methylation of VTRNA2-1 have a considerably better outcome than those with monoallelic or biallelic methylation (n = 101, P = .001). We show that methylation is inversely correlated with vtRNA2-1 expression, and that 5-azanucleosides induce vtRNA2-1 and down-regulate the phosphorylated RNA-dependent protein kinase (pPKR), whose activity has been shown to be modulated by vtRNA2-1. Because pPKR promotes cell survival in AML, the data are consistent with vtRNA2-1 being a tumor suppressor in AML. This is the first study to show that vtRNA2-1 might play a significant role in AML, that it is either mono- or biallelically expressed in the blood cells of healthy individuals, and that its methylation state predicts outcome in AML.