The erythroid transcription factor NF-E2 is an obligate heterodimer composed of two different subunits (p45 and p18), each containing a basic region-leucine zipper DNA binding domain, and it plays a critical role in erythroid differentiation as an enhancer-binding protein for expression of the beta-globin gene. We show here that dimethyl sulfoxide treatment of wild-type murine erythroleukemia cells, but not a mutant clone of dimethyl sulfoxide-resistant cells, increases NF-E2 activity significantly, which involves both up-regulation of DNA binding and transactivation activities. Both activities were reduced markedly by treatment of cells with 2-aminopurine but not by genistein. Activation of the Ras-Raf-MAP kinase signaling cascade increased NF-E2 activity significantly, but this was suppressed when MafK was overexpressed. Domain analysis revealed an activation domain in the NH2-terminal region of p45 and a suppression domain in the basic region-leucine zipper of MafK. These findings indicate that induction of NF-E2 activity is essential for erythroid differentiation of murine erythroleukemia cells, and serine/threonine phosphorylation may be involved in this process. In addition, they also suggest that a MafK homodimer can suppress transcription, not only by competition for the DNA binding site, but also by direct inhibition of transcription. Hence, MafK may function as an active transcription repressor.