By interacting with transcription machinery, high-mobility group A 1 (HMGA1) proteins alter the chromatin structure and thereby regulate the transcriptional activity of several genes. To assess their role in development, we studied the in vitro differentiation of embryonic stem (ES) cells that bear one or both disrupted Hmga1 alleles. Here, we report that Hmga1 null ES cells generate fewer T-cell precursors than do wild-type ES cells. Indeed, they preferentially differentiate to B cells, probably consequent to decreased interleukin 2 expression and increased interleukin 6 expression. Moreover, a lack of HMGA1 expression induces changes in hemopoietic differentiation, i.e., a reduced monocyte/macrophage population and an increase in megakaryocyte precursor numbers, erythropoiesis, and globin gene expression. Re-expression of the Hmga1 gene in Hmga1 null ES cells restores the wild-type phenotype. The effect on megakaryocyte/erythrocyte lineages seems, at least in part, mediated by the GATA-1 transcription factor, a key regulator of red blood cell differentiation. In fact, we found that Hmga1-/- ES cells overexpress GATA-1 and that HMGA1 proteins directly control GATA-1 transcription. Taken together, these data indicate that HMGA1 proteins play a prime role in lymphohematopoietic differentiation.