Human acute myeloid leukemias with the t(8;21) translocation express the AML1-ETO fusion protein in the hematopoietic stem cell compartment and show impairment in erythroid differentiation. This clinical finding is reproduced in multiple murine and cell culture model systems in which AML1-ETO specifically interferes with erythroid maturation. Using purified normal human early hematopoietic progenitor cells, we find that AML1-ETO impedes the earliest discernable steps of erythroid lineage commitment. Correspondingly, GATA-1, a central transcriptional regulator of erythroid differentiation, undergoes repression by AML1-ETO in a nonconventional histone deacetylase-independent manner. In particular, GATA-1 acetylation by its transcriptional coactivator, p300/CBP, a critical regulatory step in programming erythroid development, is efficiently blocked by AML1-ETO. Fusion of a heterologous E1A coactivator recruitment module to GATA-1 overrides the inhibitory effects of AML1-ETO on GATA-1 acetylation and transactivation. Furthermore, the E1A-GATA-1 fusion, but not wild-type GATA-1, rescues erythroid lineage commitment in primary human progenitors expressing AML1-ETO. These results ascribe a novel repressive mechanism to AML1-ETO, blockade of GATA-1 acetylation, which correlates with its inhibitory effects on primary erythroid lineage commitment.