Polymorphonuclear leukocytes are essential for host defense to infectious diseases. CCAAT/enhancer binding protein ɛ (C/EBPɛ) is preferentially expressed in granulocytes and lymphoid cells. Mice with a null mutation in C/EBPɛ develop normally and are fertile but fail to generate functional neutrophils and eosinophils. Opportunistic infections and tissue destruction lead to death by 3–5 months of age. Furthermore, end-stage mice develop myelodysplasia, characterized by proliferation of atypical granulocytes that efface the bone marrow and result in severe tissue destruction. Thus, C/EBPɛ is essential for terminal differentiation and functional maturation of committed granulocyte progenitor cells.