The hematopoietic transcription factor GATA-1 is essential for development of the erythroid and megakaryocytic lineages. Using the conserved zinc finger DNA-binding domain of GATA-1 in the yeast two- hybrid system, we have identified a novel, multitype zinc finger protein, Friend of GATA-1 (FOG), which binds GATA-1 but not a functionally inactive mutant lacking the amino (N) finger. FOG is coexpressed with GATA-1 during embryonic development and in erythroid and megakaryocytic cells. Furthermore, FOG and GATA-1 synergistically activate transcription from a hematopoietic-specific regulatory region and cooperate during both erythroid and megakaryocytic cell differentiation. These findings indicate that FOG acts as a cofactor for GATA-1 and provide a paradigm for the regulation of cell type-specific gene expression by GATA transcription factors.