Approximately 20% of acute myeloid leukemia (AML) patients carry mutations in IDH1 or IDH2 that result in over-production of the oncometabolite D-2-hydroxyglutarate (2-HG). Small molecule inhibitors that block 2-HG synthesis can induce complete morphological remission; however, almost all patients eventually acquire drug resistance and relapse. Using a multi-allelic mouse model of IDH1-mutant AML, we demonstrate that the clinical IDH1 inhibitor AG-120 (ivosidenib) exerts cell-type-dependent effects on leukemic cells, promoting delayed disease regression. Although single-agent AG-120 treatment does not fully eradicate the disease, it increases cycling of rare leukemia stem cells and triggers transcriptional upregulation of the pyrimidine salvage pathway. Accordingly, AG-120 sensitizes IDH1-mutant AML to azacitidine, with the combination of AG-120 and azacitidine showing vastly improved efficacy in vivo. Our data highlight the impact of non-genetic heterogeneity on treatment response and provide a mechanistic rationale for the observed combinatorial effect of AG-120 and azacitidine in patients.