The transcription factor C/EBP alpha (CCAAT/enhancer binding protein alpha) is critical for granulopoiesis. Gene disruption in mice blocks early granulocyte differentiation and disruption of C/EBP alpha function has been implicated in human acute myeloid leukemia (AML), but no systematic structure-function analysis has been undertaken to identify the mechanisms involved in C/EBP alpha-mediated granulocyte differentiation. Here we demonstrate that loss of either of 2 key regions results in disruption of C/EBP alpha granulocytic development: the amino terminus and specific residues residing on the non-DNA binding face of the basic region. Mutation of either results in loss of C/EBP alpha inhibition of E2F and down-regulation of c-Myc, but only mutation of the basic region results in loss of physical interaction with E2F. In contrast, while the amino terminal mutant retains the ability to interact with E2F, this mutant fails to bind a C/EBP alpha site efficiently, fails to activate C/EBP alpha target genes, and is also defective in inhibition of E2F activity. These results further emphasize the importance of inhibition of proliferative pathways in granulopoiesis and demonstrate that several regions of the C/EBP alpha protein are involved in this mechanism.