Leukemia arises as a result of a multistep progression of blood cells towards malignancy. Genetic blocks in cell development and uncontrolled proliferation are often key steps in leukemic transformation. PU.1 is a transcription factor that has several known roles in hematopoietic development. Knock-out studies of PU.1 demonstrate a requirement for PU.1 in the development of myeloid and lymphoid cells. In addition, PU.1 concentration can influence cell development in normal hematopoiesis. Low concentrations of PU.1 are required for lymphoid development, whereas high concentrations of PU.1 are required for myeloid development. Mice that have been genetically altered to express abnormally low concentrations of PU.1 develop acute myeloid leukemia (AML) due to a developmental block within the myeloid lineage. In contrast, abnormally high concentrations of PU.1 in mice are capable of inducing erythroleukemias. This can occur through Friend virus integration into the PU.1 gene, which leads to over-expression of PU.1, and the subsequent blocking of erythroid development due to PU.1’s ability to antagonize GATA-1 function. Here we report that ectopic expression of PU.1 is sufficient to immortalize hematopoietic progenitors in a GM-CSF-dependent manner. When fetal hematopoietic progenitors are infected with a PU.1 retrovirus and placed into culture with GM-CSF, a small fraction become immortalized. These PU.1-infected progenitors (PIP cells) are arrested in development and can grow for several months in culture. PU.1 Immortalized Progenitors (PIP) are GM-CSF restricted and dependent. In addition, PIP cells display blast-like morphology and express cell surface markers indicative of myeloid development. In contrast, gene expression analysis of clonal PIP cell lines demonstrates the expression of stem cell, myeloid, and erythroid specific genes. Finally, PIP cells display low levels of endogenous PU.1 production as shown by real-time PCR relative to wild-type cells. These observations support a model in which high levels of PU.1, in conjunction with signaling through the GM-CSF receptor, block cell differentiation at an early stage in hematopoiesis. This discovery provides new information into PU.1’s ability to control cell differentiation and its ability to induce leukemia.