Hematological changes induced by various stress stimuli are accompanied by replacement of the primary acetylcholinesterase (AChE) 3' splice variant acetylcholinesterase-S (AChE-S) with the myelopoietic acetylcholinesterase-R (AChE-R) variant. To search for putative acetylcholinesterase-S interactions with hematopoietic pathways, we employed a yeast two-hybrid screen. The transcriptional co-repressor C-terminal binding protein (CtBP) was identified as a protein partner of the AChE-S C terminus. In erythroleukemic K562 cells, AChE-S displayed nuclear colocalization and physical interaction with CtBP. Furthermore, co-transfected AChE-S reduced the co-repressive effect of CtBP over the hematopoietic transcription factor, Ikaros. In transgenic mice, overexpressed human (h) AChE-S mRNA induced selective bone marrow upregulation of Ikaros while suppressing FOG, another transcriptional partner of CtBP. Transgenic bone marrow cells showed a correspondingly elevated potential for producing progenitor colonies, compared with controls, while peripheral blood showed increased erythrocyte counts as opposed to reduced platelets, granulocytes and T lymphocytes. AChE's 3' alternative splicing, and the corresponding changes in AChE-S/CtBP interactions, thus emerge as being actively involved in controlling hematopoiesis and the potential for modulating immune functions, supporting reports on malfunctioning immune reactions under impaired splice site selection.