Preclinical evaluation of therapeutic agents using an appropriate animal model is a critical step and a requirement for selecting drugs worth testing in humans. Therapeutic agents such as small molecule inhibitors, biological agents, immune checkpoint inhibitors, and immunotherapy each have unique mechanisms of action and call for careful selection of in vivo systems in which their efficacy can be tested. The purpose of this article is to describe in detail development of one such leukemia xenograft model for testing the therapeutic efficacy of novel agents. Using an immunocompromised (NRG) murine model that lacks B, T, and NK cells helps engraftment of transplanted leukemia cells and provides an acceptable microenvironment to study the therapeutic efficacy of small molecule inhibitors and some biological agents. This article describes the development of leukemia murine xenografts for in vivo drug testing using an acute myeloid leukemia (AML) cell line murine model treated with the cytotoxic drugs daunorubicin and cytarabine as an example. Treatment response can be assessed during therapy using several noninvasive and minimally invasive methods. Bioluminescence imaging can be used to measure leukemia burden over time when luciferase prelabeled leukemia cells are used to develop xenografts. Peripheral blood count analysis provides vital information about side effects such as myelosuppression (e.g., cytopenia) and therapeutic effect (e.g., blast count or differentiation). These techniques help track differences in the development of leukemia or decrease in tumor burden at various time points during the drug treatment without scarifying the study animals. Secondary methods such as immunophenotyping using flow cytometry are applied to confirm differences in the leukemia burden among treated and untreated groups. The methods described here can be tailored and used for developing xenografts of other types of leukemia (e.g., acute lymphoblastic leukemia).