The megakaryocyte/erythroid transient myeloproliferative disorder (TMD) in newborns with Down syndrome (DS) occurs when Nterminal truncating mutations of the hemopoietic transcription factor GATA1, that produce GATA1short protein (GATA1s), are acquired early in development. Prior work has shown that murine GATA1s, by itself, causes a transient yolk sac myeloproliferative disorder. However, it is unclear where in the hemopoietic cellular hierarchy GATA1s exerts its effects to produce this myeloproliferative state. Here, through a detailed examination of hemopoiesis from murine GATA1s embryonic stem cells (ESC) and GATA1s embryos we define defects in erythroid and megakaryocytic differentiation that occur late in hemopoiesis. GATA1s causes an arrest late in erythroid differentiation in vivo, and even more profoundly in ESC-derived cultures, with a marked reduction of Ter-119 cells and reduced erythroid gene expression. In megakaryopoiesis, GATA1s causes a differentiation delay at a specific stage, with accumulation of immature, kit-expressing CD41hi megakaryocytic cells. In this specific megakaryocytic compartment, there are increased numbers of GATA1s cells in S-phase of the cell cycle and a reduced number of apoptotic cells compared to GATA1 cells in the same cell compartment. There is also a delay in maturation of these immature GATA1s megakaryocytic lineage cells compared to GATA1 cells at the same stage of differentiation. Finally, even when GATA1s megakaryocytic cells mature, they mature aberrantly with altered megakaryocyte-specific gene expression and activity of the mature megakaryocyte enzyme, acetylcholinesterase. These studies pinpoint the hemopoietic compartment where GATA1s megakaryocyte myeloproliferation occurs, defining where molecular studies should now be focused to understand the oncogenic action of GATA1s.