PU.1 is an Ets family transcription factor that is essential for fetal liver hematopoiesis. We have generated a PU.1^gfp reporter strain that allowed us to examine the expression of PU.1 in all hematopoietic cell lineages and their early progenitors. Within the bone marrow progenitor compartment, PU.1 is highly expressed in the hematopoietic stem cell, the common lymphoid progenitor, and a proportion of common myeloid progenitors (CMPs). Based on Flt3 and PU.1 expression, the CMP could be divided into three subpopulations, Flt3⁺ PU.1^hi, Flt3⁻ PU.1^hi, and Flt3⁻ PU.1^lo CMPs. Colony-forming assays and in vivo lineage reconstitution demonstrated that the Flt3⁺ PU.1^hi and Flt3⁻ PU.1^hi CMPs were efficient precursors for granulocyte/macrophage progenitors (GMPs), whereas the Flt3⁻ PU.1^lo CMPs were highly enriched for committed megakaryocyte/erythrocyte progenitors (MEPs). CMPs have been shown to rapidly differentiate into GMPs and MEPs in vitro. Interestingly, short-term culture revealed that the Flt3⁺ PU.1^hi and Flt3⁻ PU.1^hi CMPs rapidly became CD16/32^high (reminiscent of GMPs) in culture, whereas the Flt3⁻ PU.1^lo CMPs were the immediate precursors of the MEP. Thus, down-regulation of PU.1 expression in the CMP is the first molecularly identified event associated with the restriction of differentiation to erythroid and megakaryocyte lineages.