Inhibition of differentiation has been proposed as an important mechanism for Myc-induced tumorigenesis, but the mechanisms involved are unclear. We have established a genetically defined differentiation model in human leukemia K562 cells by conditional expression of the cyclin-dependent kinase (Cdk) inhibitor p27 (inducible by Zn(2+)) and Myc (activatable by 4-hydroxy-tamoxifen). Induction of p27 resulted in erythroid differentiation, accompanied by Cdk inhibition and G(1) arrest. Interestingly, activation of Myc inhibited p27-mediated erythroid differentiation without affecting p27-mediated proliferation arrest. Microarray-based gene expression indicated that, in the presence of p27, Myc blocked the upregulation of several erythroid-cell-specific genes, including NFE2, JUNB, and GATA1 (transcription factors with a pivotal role in erythropoiesis). Moreover, Myc also blocked the upregulation of Mad1, a transcriptional antagonist of Myc that is able to induce erythroid differentiation. Cotransfection experiments demonstrated that Myc-mediated inhibition of differentiation is partly dependent on the repression of Mad1 and GATA1. In conclusion, this model demonstrates that Myc-mediated inhibition of differentiation depends on the regulation of a specific gene program, whereas it is independent of p27-mediated cell cycle arrest. Our results support the hypothesis that differentiation inhibition is an important Myc tumorigenic mechanism that is independent of cell proliferation.