The process through which multipotential hematopoietic cells commit to distinct lineages involves the induction of specific transcription factors. PU.1 (also known as Spi-1) and GATA-1 are transcription factors essential for the development of myeloid and erythroid lineages, respectively. Overexpression of PU.1 and GATA-1 can block differentiation in lineages in which they normally are down-regulated, indicating that not only positive but negative regulation of these factors plays a role in normal hematopoietic lineage development. Here we demonstrate that a region of the PU.1 Ets domain (the winged helix–turn–helix wing) interacts with the conserved carboxyl-terminal zinc finger of GATA-1 and GATA-2 and that GATA proteins inhibit PU.1 transactivation of critical myeloid target genes. We demonstrate further that GATA inhibits binding of PU.1 to c-Jun, a critical coactivator of PU.1 transactivation of myeloid promoters. Finally, PU.1 protein can inhibit both GATA-1 and GATA-2 transactivation function. Our results suggest that interactions between PU.1 and GATA proteins play a critical role in the decision of stem cells to commit to erythroid vs. myeloid lineages.