PR-104, a phosphate ester of the nitrogen mustard prodrug PR-104A, has shown evidence of efficacy in adult leukemia clinical trials. Originally designed to target hypoxic cells, PR-104A is independently activated by aldo-keto-reductase 1C3 (AKR1C3). The aim of this study was to test whether AKR1C3 is a predictive biomarker of in vivo PR-104 sensitivity. In a panel of 7 patient-derived pediatric acute lymphoblastic leukemia (ALL) xenografts, PR-104 showed significantly greater efficacy against T-lineage ALL (T-ALL) than B-cell-precursor ALL (BCP-ALL) xenografts. Single-agent PR-104 was more efficacious against T-ALL xenografts compared with a combination regimen of vincristine, dexamethasone, and l-asparaginase. Expression of AKR1C3 was significantly higher in T-ALL xenografts compared with BCP-ALL, and correlated with PR-104/PR-104A sensitivity in vivo and in vitro. Overexpression of AKR1C3 in a resistant BCP-ALL xenograft resulted in dramatic sensitization to PR-104 in vivo. Testing leukemic blasts from 11 patients confirmed that T-ALL cells were more sensitive than BCP-ALL to PR-104A in vitro, and that sensitivity correlated with AKR1C3 expression. Collectively, these results indicate that PR-104 shows promise as a novel therapy for relapsed/refractory T-ALL, and that AKR1C3 expression could be used as a biomarker to select patients most likely to benefit from such treatment in prospective clinical trials.