Inhibitors of DNA binding (Id) family members are key regulators of cellular differentiation and proliferation. These activities are related to the ability of Id proteins to antagonize E proteins and other transcription factors. As negative regulators of E proteins, Id proteins have been implicated in lymphocyte development. Overexpression of Id1, Id2, or Id3 has similar effects on lymphocyte development. However, which Id protein plays a physiologic role during lymphocyte development is not clear. By analyzing Id2 knock-out mice and retroviral transduced hematopoietic progenitors, we demonstrated that Id2 is an intrinsic negative regulator of B-cell development. Hematopoietic progenitor cells overexpressing Id2 did not reconstitute B-cell development in vivo, which resembled the phenotype of E2A null mice. The B-cell population in bone marrow was significantly expanded in Id2 knock-out mice compared with their wild-type littermates. Knock-down of Id2 by shRNA in hematopoietic progenitor cells promoted B-cell differentiation and induced the expression of B-cell lineage-specific genes. These data identified Id2 as a physiologically relevant regulator of E2A during B lymphopoiesis. Furthermore, we identified a novel Id2 function in erythroid development. Overexpression of Id2 enhanced erythroid development, and decreased level of Id2 impaired normal erythroid development. Id2 regulation of erythroid development is mediated via interacting with transcription factor PU.1 and modulating PU.1 and GATA-1 activities. We conclude that Id2 regulates lymphoid and erythroid development via interaction with different target proteins.