The transcription factor C/EBPalpha is crucial for the differentiation of granulocytes. Conditional expression of C/EBPalpha triggers neutrophilic differentiation, and C/EBPalpha can block 12-O-tetradecanoylphorbol-13-acetate-induced monocytic differentiation of bipotential myeloid cells. In C/EBPalpha knockout mice, no mature granulocytes are present. A dramatic increase of c-Jun mRNA in C/EBPalpha knockout mouse fetal liver was observed. c-Jun, a component of the AP-1 transcription factor complex and a coactivator of the transcription factor PU.1, is important for monocytic differentiation. Here we report that C/EBPalpha downregulates c-Jun expression to drive granulocytic differentiation. An ectopic increase of C/EBPalpha expression decreases the c-Jun mRNA level, and the human c-Jun promoter activity is downregulated eightfold in the presence of C/EBPalpha. C/EBPalpha and c-Jun interact through their leucine zipper domains, and this interaction prevents c-Jun from binding to DNA. This results in downregulation of c-Jun's capacity to autoregulate its own promoter through the proximal AP-1 site. Overexpression of c-Jun prevents C/EBPalpha-induced granulocytic differentiation. Thus, we propose a model in which C/EBPalpha needs to downregulate c-Jun expression and transactivation capacity for promoting granulocytic differentiation.