The pathogenesis of donor cell leukemia (DCL) after allogeneic hematopoietic stem cell transplantation (allo-HSCT) is unclear and likely multifactorial. Leukemic transformation of healthy donor HSCs in recipient's bone marrow microenvironment provides a useful in vivo model for investigating the mechanisms involved in leukemogenesis. Here, we report a rare case of late-onset DCL developing in a recipient. Whole-genome sequencing indicates that donor-derived cells harboring clonal hematopoiesis of indeterminate potential (CHIP)-associated genetic alterations expand and eventually transform to full-blown AML via acquisition of additional somatic mutations within the recipient's bone marrow microenvironment. The 10× single-cell RNA sequencing reveals the abundance of GMP-like cells with a specific transcriptional signature in DCL. Moreover, impaired immune surveillance, including dysfunction of cytotoxic T lymphocytes (CTLs) and decreased number of canonical NK cells, is discovered in DCL. Our data add valuable information to the current understanding of the mechanisms of DCL.