C/EBPalpha is an essential transcription factor required for myeloid differentiation. While C/EBPalpha can act as a cell fate switch to promote granulocyte differentiation in bipotential granulocyte-macrophage progenitors (GMPs), its role in regulating cell fate decisions in more primitive progenitors is not known. We found increased numbers of erythroid progenitors and erythroid cells in C/EBPalpha(-/-) fetal liver (FL). Also, enforced expression of C/EBPalpha in hematopoietic stem cells resulted in a loss of erythroid progenitors and an increase in myeloid cells by inhibition of erythroid development and inducing myeloid differentiation. Conditional expression of C/EBPalpha in murine erythroleukemia (MEL) cells induced myeloid-specific genes, while inhibiting erythroid-specific gene expression including erythropoietin receptor (EpoR), which suggests a novel mechanism to determine hematopoietic cell fate. Thus, C/EBPalpha functions in hematopoietic cell fate decisions by the dual actions of inhibiting erythroid and inducing myeloid gene expression in multipotential progenitors.