Zinc finger genes encode proteins that act as transcription factors. The myeloid zinc finger 1 (MZF1) gene encodes a zinc finger protein with two DNA-binding domains that recognize two distinct consensus sequences, is preferentially expressed in hematopoietic cells, and may be involved in the transcriptional regulation of hematopoiesis-specific genes. Reverse transcription-PCR analysis of human peripheral blood CD34+ cells cultured under lineage-restricted conditions demonstrated MZF1 expression during both myeloid and erythroid differentiation. Sequence analysis of the 5'-flanking region of the CD34 and c-myb genes, which are a marker of and a transcriptional factor required for hematopoietic proliferation and differentiation, respectively, revealed closely spaced MZF1 consensus binding sites found by electrophoretic mobility shift assays to interact with recombinant MZF1 protein. Transient or constitutive MZF1 expression in different cell types resulted in specific inhibition of chloramphenicol acetyltransferase activity driven by the CD34 or c-myb 5'-flanking region. To determine whether transcriptional modulation by MZF1 activity plays a role in hematopoietic differentiation, constructs containing the MZF1 cDNA under the control of different promoters were transfected into murine embryonic stem cells which, under defined in vitro culture conditions, generate colonies of multiple hematopoietic lineages. Constitutive MZF1 expression interfered with the ability of embryonic stem cells to undergo hematopoietic commitment and erythromyeloid colony formation and prevented the induced expression of CD34 and c-myb mRNAs during differentiation of these cells. These data indicate that MZF1 plays a critical role in hematopoiesis by modulating the expression of genes involved in this process.