Acute myeloid leukemia (AML) is a type of hematological malignancy with a poor prognosis caused by diverse genetic mutations. One effective treatment approach is to induce the differentiation of AML cells, which may help curb their unrestrained proliferation. In search of novel differentiation-inducing drug candidates, a phenotypic screen of a chemical library was performed, and Azvudine, a new anti-HIV agent approved by the China FDA in 2021, was identified as the most effective agent. Azvudine efficiently drove differentiation in multiple human AML cell lines, which was strongly associated with G2/M cell cycle arrest and apoptosis in vitro. In vivo analyses using murine xenograft models showed that this drug efficiently stimulated the differentiation of AML cells, diminished the tumor burden and metastasis, and prolonged the survival of mice. Importantly, the anti-leukemic effects of Azvudine were recapitulated in AML patient samples with various mutations, including TP53, a genetic lesion associated with adverse risk. Mechanistic studies showed that the inhibitory activity of Azvudine was directed mainly against telomerase reverse transcriptase (TERT), causing telomerase dysfunction and telomere shortening. This was accompanied by a DNA damage response, culminating in p21 upregulation and subsequent cellular differentiation in AML. In addition, increased ROS levels in the mitochondria by Azvudine modulated the Bcl-2 family proteins and promoted apoptosis, acting as a further anti-AML mechanism. Considering that telomerase-targeted therapies are currently under active clinical investigation, these compelling preclinical data justify the repositioning of Azvudine as an AML differentiation-inducing therapy.