The FLI-1 oncogene, a member of the ETS family of transcription factors, is associated with both normal and abnormal hematopoietic cell growth and lineage-specific differentiation. We have previously shown that overexpression of FLI-1 in pluripotent human hematopoietic cells leads to the induction of a megakaryocytic phenotype. In this report we show that FLI-1 also acts as an inhibitor of erythroid differentiation. Following the induction of erythroid differentiation, pluripotent cells express reduced levels of FLI-1. In contrast, when FLI-1 is overexpressed in these cells, the levels of erythroid markers are reduced. The ability of FLI-1 overexpressing cells to respond to erythroid-specific inducers such as hemin and Ara-C is also inhibited, and the uninduced cells show a reduced level of the erythroid-associated GATA-1 transcription factor mRNA. Furthermore, expression of a GATA-1 promoter-driven reporter construct in K562 cells is inhibited by co-transfection with a construct expressing FLI-1. Our results support the hypothesis that FLI-1 can act both positively and negatively in the regulation of hematopoietic cell differentiation, and that inhibition of GATA-1 expression may contribute to FLI-1-mediated inhibition of erythroid differentiation.