Upregulation of the plasma membrane receptor IL1RAP in Acute Myeloid Leukemia (AML) has been reported but its role in the context of the leukemic bone marrow niche is unclear. Here, we studied the signaling events downstream of IL1RAP in relation to leukemogenesis and normal hematopoiesis. High IL1RAP expression was associated with a leukemic GMP-like state, and knockdown of IL1RAP in AML reduced colony-forming capacity. Stimulation with IL1β resulted in the induction of multiple chemokines and an inflammatory secretome via the p38 MAPK and NFκB signaling pathways in IL1RAP-expressing AML cells, but IL1β-induced signaling was dispensable for AML cell proliferation and NFκB-driven survival. IL1RAP was also expressed in stromal cells where IL1β induced expression of inflammatory chemokines and cytokines as well. Intriguingly, the IL1β-induced inflammatory secretome of IL1RAPexpressing AML cells grown on a stromal layer of mesenchymal stem cells affected normal hematopoiesis including hematopoietic stem/progenitor cells while AML cell proliferation was not affected. The addition of Anakinra, an FDA-approved IL1 receptor antagonist, could reverse this effect. Therefore, blocking the IL1-IL1RAP signaling axis might be a good therapeutic approach to reduce inflammation in the bone marrow niche and thereby promote normal hematopoietic recovery over AML proliferation after chemotherapy.