The AML1 gene on chromosome 21 is disrupted in the (8;21)(q22;q22) and (3;21)(q26;q22) translocations associated with myelogenous leukemias and encodes a DNA-binding protein. From AML1 gene, two representative forms of proteins, AML1a and AML1b, are produced by an alternative splicing. Both forms have DNA-binding domain, but AML1a lacks a putative transcriptional activation domain which AML1b has. Here we demonstrate that AML1a, which solely has no effects as a transcriptional regulator, dominantly suppresses transcriptional activation by AML1b, and that AML1a exhibits the higher affinity for DNA-binding than AML1b. Furthermore a dominant negative form of AML1, AML1a, totally suppressed granulocytic differentiation otherwise induced by granulocyte colony-stimulating factor when AML1a was overexpressed in 32Dc13 murine myeloid cells. Such differentiation block by AML1a was canceled by the concomitant overexpression of AML1b. These data strongly suggest that a transcriptionally active form of AML1 is essential for the myeloid cell differentiation. In addition, we observed an altered expression level of AML1 along with the myeloid differentiation in several hemopoietic cell lines. In these cases, at least, the AML1 expression level is a potential regulator for myeloid cell differentiation.