Acute leukemia is an aggressive blood malignancy with low survival rates. A high expression of stem-like programs in leukemias predicts poor prognosis and is assumed to act in an aberrant fashion in the phenotypically heterogeneous leukemia stem cell (LSC) population. A lack of suitable genome engineering tools that can isolate LSCs based on their stemness precludes their comprehensive examination and full characterization. We hypothesized that tagging endogenous stemness-regulatory regions could generate a genome reporter for the putative leukemia stemness-state. Our analysis revealed that the ERG + 85 enhancer region can serve as a marker for stemness-state and a fluorescent lentiviral reporter was developed that can accurately recapitulate the endogenous activity. Using our novel reporter, we revealed cellular heterogeneity in several leukemia cell lines and patient-derived samples. Alterations in reporter activity were associated with transcriptomic and functional changes that were closely related to the hematopoietic stem cell (HSC) identity. Notably, the differentiation potential was skewed towards the erythro-megakaryocytic lineage. Moreover, an ERG + 85 fraction of AML cells could regenerate the original cellular heterogeneity and was enriched for LSCs. RNA-seq analysis coupled with in silico drug-screen analysis identified 4HPR as an effective inhibitor of ERG + 85 leukemia growth. We propose that further utilization of our novel molecular tool will identify crucial determinants of LSCs, thus providing a rationale for their therapeutic targeting.