Transcription factor GATA-1 is essential at multiple stages of hematopoiesis. Murine gene targeting and analysis of naturally occurring human mutations demonstrate that GATA-1 drives the maturation of committed erythroid precursors and megakaryocytes. Prior studies also suggest additional, poorly defined, roles for GATA-1 at earlier stages of erythromegakaryocytic differentiation. To investigate these functions further, we stimulated Gata1^- murine embryonic stem-cell-derived hematopoietic cultures with thrombopoietin, a multistage cytokine. Initially, the cultures generated a wave of mutant megakaryocytes. However, these were rapidly overgrown by a unique population of thrombopoietin-dependent blasts that express immature markers and proliferate indefinitely. Importantly, on restoration of GATA-1 function, these cells differentiated into both erythroid and megakaryocytic lineages, suggesting that they represent bipotential progenitors. Identical cells are also present in vivo, as indicated by flow cytometry and culture analysis of fetal livers from Gata1^- chimeric mice. Our findings indicate that loss of GATA-1 impairs the maturation of megakaryocyte-erythroid progenitors. This defines a new role for GATA-1 at a relatively early stage of hematopoiesis and provides potential insight into recent discoveries that human GATA1 mutations promote acute megakaryoblastic leukemia, a clonal malignancy with features of both erythroid and megakaryocyte maturation.