Dissecting the molecular mechanisms used by developmental regulators is essential to understand tissue specification/differentiation. SCL/TAL-1 is a basic helix-loop-helix transcription factor absolutely critical for hematopoietic stem/progenitor cell specification and lineage maturation. Using in vitro and forced expression experimental systems, we previously suggested that SCL might have DNA-binding-independent functions. Here, to assess the requirements for SCL DNA-binding activity in vivo, we examined hematopoietic development in mice carrying a germline DNA-binding mutation. Remarkably, in contrast to complete absence of hematopoiesis and early lethality in scl-null embryos, specification of hematopoietic cells occurred in homozygous mutant embryos, indicating that direct DNA binding is dispensable for this process. Lethality was forestalled to later in development, although some mice survived to adulthood. Anemia was documented throughout development and in adulthood. Cellular and molecular studies showed requirements for SCL direct DNA binding in red cell maturation and indicated that scl expression is positively autoregulated in terminally differentiating erythroid cells. Thus, different mechanisms of SCL's action predominate depending on the developmental/cellular context: indirect DNA binding activities and/or sequestration of other nuclear regulators are sufficient in specification processes, whereas direct DNA binding functions with transcriptional autoregulation are critically required in terminal maturation processes.