Approximately 50% of acute myeloid leukemia (AML) patients do not respond to induction therapy (primary induction failure [PIF]) or relapse after <6 months (early relapse [ER]). We have recently shown an association between an immune-infiltrated tumor microenvironment (TME) and resistance to cytarabine-based chemotherapy but responsiveness to flotetuzumab, a bispecific DART antibody-based molecule to CD3ε and CD123. This paper reports the results of a multicenter, open-label, phase 1/2 study of flotetuzumab in 88 adults with relapsed/refractory AML: 42 in a dose-finding segment and 46 at the recommended phase 2 dose (RP2D) of 500 ng/kg per day. The most frequent adverse events were infusion-related reactions (IRRs)/cytokine release syndrome (CRS), largely grade 1-2. Stepwise dosing during week 1, pretreatment dexamethasone, prompt use of tocilizumab, and temporary dose reductions/interruptions successfully prevented severe IRR/CRS. Clinical benefit accrued to PIF/ER patients showing an immune-infiltrated TME. Among 30 PIF/ER patients treated at the RP2D, the complete remission (CR)/CR with partial hematological recovery (CRh) rate was 26.7%, with an overall response rate (CR/CRh/CR with incomplete hematological recovery) of 30.0%. In PIF/ER patients who achieved CR/CRh, median overall survival was 10.2 months (range, 1.87-27.27), with 6- and 12-month survival rates of 75% (95% confidence interval [CI], 0.450-1.05) and 50% (95% CI, 0.154-0.846). Bone marrow transcriptomic analysis showed that a parsimonious 10-gene signature predicted CRs to flotetuzumab (area under the receiver operating characteristic curve = 0.904 vs 0.672 for the European LeukemiaNet classifier). Flotetuzumab represents an innovative experimental approach associated with acceptable safety and encouraging evidence of activity in PIF/ER patients. This trial was registered at www.clinicaltrials.gov as #NCT02152956. Key Points: • Flotetuzumab is associated with acceptable safety and evidence of activity in AML patients with PIF/ER. • A 10-gene immune signature predicts response to flotetuzumab with greater accuracy than the ELN risk classifier.