Abstract Several rRNA modifying enzymes install rRNA modifications while participating in ribosome assembly. Here, we show that 18 S rRNA methyltransferase DIMT1 is essential for acute myeloid leukemia (AML) proliferation through a non-catalytic function. We reveal that targeting a positively charged cleft of DIMT1, remote from the catalytic site, weakens the binding of DIMT1 to rRNA and mis-localizes DIMT1 to the nucleoplasm, in contrast with the primarily nucleolar localization of wild-type DIMT1. Mechanistically, rRNA binding is required for DIMT1 to undergo liquid-liquid phase separation, which explains why the distinct nucleoplasm localization of the rRNA-binding deficient DIMT1. Re-expression of wild-type or a catalytically inactive mutant E85A, but not the rRNA-binding deficient DIMT1, supports AML cell proliferation. This study provides a new strategy to target DIMT1-regulated AML proliferation via targeting this essential non-catalytic region.