Leukocyte immunoglobulin-like receptor B (LILRB), a family of immune checkpoint receptors, contributes to acute myeloid leukemia (AML) development, but the specific mechanisms triggered by activation or inhibition of these immune checkpoints in cancer is largely unknown. Here we demonstrate that the intracellular domain of LILRB3 is constitutively associated with the adaptor protein TRAF2. Activated LILRB3 in AML cells leads to recruitment of cFLIP and subsequent NF-κB upregulation, resulting in enhanced leukemic cell survival and inhibition of T-cell-mediated anti-tumor activity. Hyperactivation of NF-κB induces a negative regulatory feedback loop mediated by A20, which disrupts the interaction of LILRB3 and TRAF2; consequently the SHP-1/2-mediated inhibitory activity of LILRB3 becomes dominant. Finally, we show that blockade of LILRB3 signaling with antagonizing antibodies hampers AML progression. LILRB3 thus exerts context-dependent activating and inhibitory functions, and targeting LILRB3 may become a potential therapeutic strategy for AML treatment.