The t(8;21) translocation, which encodes the AML1-ETO fusion protein (now known as RUNX1-CBF2T1), is one of the most frequent translocations in acute myeloid leukemia, although its role in leukemogenesis is unclear. Here, we report that exogenous expression of AML1-ETO in human CD34(+) cells severely disrupts normal erythropoiesis, resulting in virtual abrogation of erythroid colony formation. In contrast, in bulk liquid culture of purified erythroid cells, we found that while AML1-ETO initially inhibited proliferation during early (erythropoietin [EPO]-independent) erythropoiesis, growth inhibition gave way to a sustained EPO-independent expansion of early erythroid cells that continued for more than 60 days, whereas control cultures became growth arrested after 10 to 13 days (at the EPO-dependent stage of development). Phenotypic analysis showed that although these cells were CD13(-) and CD34(-), unlike control cultures, these cells failed to up-regulate CD36 or to down-regulate CD33, suggesting that expression of AML1-ETO suppressed the differentiation of these cells and allowed extensive self-renewal to occur. In the early stages of this expansion, addition of EPO was able to promote both phenotypic (CD36(+), CD33(-), glycophorin A(+)) and morphologic differentiation of these cells, almost as effectively as in control cultures. However, with extended culture, cells expressing AML1-ETO became refractory to addition of this cytokine, suggesting that a block in differentiation had been established. These data demonstrate the capacity of AML1-ETO to promote the self-renewal of human hematopoietic cells and therefore support a causal role for t(8;21) translocations in leukemogenesis.