The ETS-family transcription factor PU.1 is expressed in hematopoietic tissues, with significant levels of expression in the monocytic and B lymphocytic lineages. PU.1 is identical to the Spi-1 proto-oncogene which is associated with the generation of spleen focus-forming virus-induced erythroleukemias. An extensive body of in vitro gene regulatory studies has implicated PU.1 as an important, versatile regulator of B lymphoid- and myeloid-specific genes. The first half of the review is designed to coalesce data generated from studies examining the two PU.1 "knockout" animals, which have prompted a reevaluation of the proposed function of PU.1 during hematopoiesis. During hematopoiesis, PU.1 is required for development along the lymphoid and myeloid lineages but needs to be downregulated during erythropoiesis. These unique functional characteristics of PU.1 will be exemplified by contrasting the function of PU.1 with other transcription factors required during fetal hematopoiesis. The second half of this review will reexamine the functional characteristics of PU.1 deduced from traditional biochemical and transactivation assays in light of recent experiments examining the functional behavior of PU.1 in an embryonic stem cell in vitro differentiation system. Working models of how PU.1 regulates promoter and enhancer regions in the B cell and myeloid lineage will be presented and discussed.