p205 belongs to a family of interferon-inducible proteins called the IFI-200 family, which have been implicated in the regulation of cell growth and differentiation. While p205 is induced in hematopoietic stem cells during myeloid cell differentiation, its function is not known. Therefore, the aim of this study was to determine the role of p205 in regulating proliferation in hematopoietic progenitor cells and in nonhematopoietic cell lines. We found that p205 localizes to the nucleus in hematopoietic and nonhematopoietic cell lines. Transient expression of p205 in murine IL-3-dependent BaF3 and 32D-C123 progenitor cell lines inhibited IL-3-induced growth and proliferation. The closely related IFI-200 family members, p204 and p202, similarly inhibited IL-3-dependent progenitor cell proliferation. p205 also inhibited the proliferation and growth of normal hematopoietic progenitor cells. In nonhematopoietic cell lines, p205 and p204 expression inhibited NIH3T3 cell colony formation in vitro, and microinjection of p205 expression vectors into NIH3T3 fibroblasts inhibited serum-induced proliferation. We have determined the functional domains of p205 necessary for activity, which were identified as the N-terminal domain in apoptosis and interferon response (DAPIN)/PYRIN domain, and the C-terminal retinoblastoma protein (Rb)-binding motif. In addition, we have demonstrated that a putative ataxia telangiectasia, mutated (ATM) kinase phosphorylation site specifically regulates the activity of p205. Taken together, these data suggest that p205 is a potent cell growth regulator whose activity is mediated by its protein-binding domains. We propose that during myelomonocytic cell differentiation, induction of p205 expression contributes to cell growth arrest, thus allowing progenitor cells to differentiate.