Adenosine deaminase associated with RNA1 (ADAR1) deregulation contributes to therapeutic resistance in many malignancies. Here we show that ADAR1-induced hyper-editing in normal human hematopoietic progenitors impairs miR-26a maturation, which represses CDKN1A expression indirectly via EZH2, thereby accelerating cell-cycle transit. However, in blast crisis chronic myeloid leukemia progenitors, loss of EZH2 expression and increased CDKN1A oppose cell-cycle transit. Moreover, A-to-I editing of both the MDM2 regulatory microRNA and its binding site within the 3' UTR region stabilizes MDM2 transcripts, thereby enhancing blast crisis progenitor propagation. These data reveal a dual mechanism governing malignant transformation of progenitors that is predicated on hyper-editing of cell-cycle-regulatory miRNAs and the 3' UTR binding site of tumor suppressor miRNAs.