The SCL gene (also called Tal-1 or TCL5) was identified because of its association with chromosomal translocations in childhood T-cell lymphoid leukemias. SCL codes for a basic helix-loop-helix (bHLH) factor that can function as a transcriptional activator or repressor. In the adult, SCL expression is restricted to hematopoietic cells and tissues, but its function in the process of lineage commitment is unknown. The present study was designed to address the role of SCL in hematopoietic cell differentiation. SCL expression was determined in primary hematopoietic cells through the screening of cDNA samples obtained by reverse transcription-polymerase chain reaction (RT-PCR) from single cells at different stages of differentiation. SCL RNA expression was highest in bipotential and committed erythroid precursors and diminished with subsequent maturation to proerythroblasts and normoblasts. In contrast, SCL mRNA was low to undetectable in precursors of granulocytes and monocytes and their maturing progeny. The same pattern of expression was observed after erythroid or monocytic differentiation of a bipotent cell line, TF-1, in that SCL mRNA levels remained elevated during erythroid differentiation and were downregulated with monocytic differentiation. Accordingly, TF-1 was chosen as a model to investigate the functional significance of this divergent pattern of SCL expression in the two lineages. Four independent clones stably transfected with an SCL expression vector exhibited enhanced spontaneous and delta-aminolevulinic acid-induced erythroid differentiation as measured by glycophorin expression and hemoglobinization, consistent with the view that SCL is a positive regulator of erythroid differentiation. Furthermore, constitutive SCL expression interfered with monocytic differentiation, as assessed by the generation of adherent cells and the expression of Fc gamma RII in response to TPA. These results suggest that the downregulation of SCL may be required for monocytic differentiation.