The continuous generation of mature blood cells from hematopoietic progenitor cells requires a highly complex series of molecular events. To examine lineage-specific gene expression during the differentiation process, we developed a novel method combining LacZ reporter gene analysis with in vitro hematopoietic differentiation induction from mouse embryonic stem cells. For a model system using this method, we chose the erythroid and megakaryocytic differentiation pathways. Although erythroid and megakaryocytic cells possess distinct functional and morphologic features, these 2 lineages originate from bipotential erythro-megakaryocytic progenitors and share common lineage-restricted transcription factors. A portion of the 5' flanking region of the human glycoprotein IIb (alphaIIb) integrin gene extending from base -598 to base +33 was examined in detail. As reported previously, this region is sufficient for megakaryocyte-specific gene expression. However, previous reports that used human erythro-megakaryocytic cell lines suggested that one or more negative regulatory regions were necessary for megakaryocyte-specific gene expression. Our data clearly showed that an approximately 200-base enhancer region extending from -598 to -400 was sufficient for megakaryocyte-specific gene expression. This experimental system has advantages over those using erythro-megakaryocytic cell lines because it recapitulates normal hematopoietic cell development and differentiation. Furthermore, this system is more efficient than transgenic analysis and can easily examine gene expression with null mutations of specific genes.