The v-myb, ets-containing avian leukemia virus E26 is unique in its capacity to transform both erythroblasts and myeloblasts. Previous studies showing that v-myb is sufficient for the transformation of myeloid cells failed to definitively establish the role of the v-ets gene. We have now isolated a mutant of E26, ts1.1, that is temperature-sensitive for erythroid cell transformation and that we found to contain a single mutation in the v-ets gene. Surprisingly, myeloid cells transformed by this mutant showed an altered phenotype relative to wild-type-transformed cells, in that they resemble promyelocytes. In addition, infection of mature macrophages with ts1.1 led to their transformation and conversion into promyelocyte-like cells. We conclude that the v-ets domain of the p135gag-myb-ets protein of E26 has an effect on both erythroid and myeloid cell differentiation, suggesting a possible role for the c-ets/c-myb genes in the commitment of hematopoietic cells towards specific lineages.