Immunomodulatory derivative (IMiD) CC-4047, a new analog of thalidomide, directly inhibits growth of B-cell malignancies in vivo and in vitro and exhibits stronger antiangiogenic activity than thalidomide. However, there is little information on whether CC-4047 affects normal hematopoiesis. Here we investigated the effect of CC-4047 on lineage commitment and differentiation of hematopoietic stem cells. We found that CC-4047 effectively inhibits erythroid cell colony formation from CD34+ cells and increases the frequency of myeloid colonies. We also demonstrate that development of both erythropoietin-independent and erythropoietin-dependent red cell progenitors was strongly inhibited by CC-4047, while terminal red cell differentiation was unaffected. DNA microarray analysis revealed that red cell transcription factors, including GATA-1, GATA-2, erythroid Kruppel-like factor (EKLF), and growth factor independence-1B (Gfi-1b), were down-regulated in CC-4047-treated CD34+ cells, while myeloid transcription factors such as CCAAT/enhancer binding protein-alpha (C/EBPalpha), C/EBPdelta, and C/EBPepsilon were induced. Analysis of cytokine secretion indicated that CC-4047 induced secretion of cytokines that enhance myelopoiesis and inhibit erythropoiesis. In conclusion, these data indicate that CC-4047 might directly influence lineage commitment of hematopoietic cells by increasing the propensity of stem and/or progenitor cells to undergo myeloid cell development and concomitantly inhibiting red cell development. Therefore, CC-4047 provides a valuable tool to study the mechanisms underlying lineage commitment.