One of the central issues facing current biology concerns the molecular mechanisms whereby stem cells give rise to differentiated progeny. Hematopoiesis is the best-characterized stem cell system, and experiments with mice and lower vertebrates have identified a small number of transcription factors, including SCL, LMO-2, and RUNX-1, which are central to the formation and/or behavior of hematopoietic stem cells (HSCs). Tight transcriptional control of these key regulatory genes is frequently critical for their biological functions, but the mechanisms responsible are poorly understood. The SCL gene encodes a basic helix-loop-helix protein and is expressed in blood, in endothelium, and within specific regions of the central nervous system, a pattern of expression that is highly conserved across vertebrate species from mammals to teleost fish (reviewed in reference 4). Within the hematopoietic system, SCL is expressed in hemangioblasts, HSCs, and a subset of hematopoietic lineages, including both primitive and definitive erythroblasts. Although not required for self-renewal of adult HSCs (9, 46), targeted mutation of the SCL gene has shown that it is essential for the development of all hematopoietic lineages in mice (57, 61) and during murine embryonic stem (ES) cell differentiation (13, 14, 62). However, SCL−/− mouse embryos and ES cells both generate endothelial cells (62, 73), suggesting that SCL is required for lineage commitment to blood cell formation. Consistent with this concept, ectopic expression of SCL during zebra fish development results in excessive formation of hemangioblasts (19). Maintenance of SCL expression is required for normal differentiation along erythroid and megakaryocytic lineages (32, 46), whereas failure to downregulate SCL transcription during T-cell differentiation is associated with T-cell acute lymphoblastic leukemia (T-ALL) (reviewed in reference 4). Current evidence therefore demonstrates that appropriate transcriptional regulation is essential for the biological functions of SCL, and this focuses attention on the mechanisms whereby transcription of SCL itself is initiated and maintained. Several lines of work have helped define the size of the transcriptional domain necessary for the normal pattern of SCL transcription. A 130-kb human yeast artificial chromosome containing both flanking genes was able to completely rescue the lethal SCL-/- phenotype in mice (66). Consistent with this result, the pufferfish SCL genomic locus gave rise to appropriate expression in transgenic zebra fish (3), and comparisons of SCL flanking genes during vertebrate evolution revealed a limited region of conserved synteny likely to contain regulatory elements responsible for the conserved pattern of SCL expression (21, 24). Analysis of chromatin structure, together with large-scale comparative genomic sequence analysis, has led to identification of SCL enhancers with activity in transfection assays (16, 25) or in transgenic mice (6, 24, 26, 64, 67). These approaches have so far revealed a panel of five enhancers, each of which targets expression to a specific subdomain of the normal pattern of SCL expression and two of which are active in blood and/or endothelial cells. The +18/19 enhancer is sufficient to direct reporter gene expression to hematopoietic progenitors and endothelial cells during development (64), to the vast majority of long-term-repopulating HSCs from adult bone marrow and fetal liver (65), and to putative hemangioblasts within frog dorsolateral plate mesoderm (26). Expression of an SCL cDNA under the control of this enhancer in transgenic mice selectively rescued the formation of early hematopoietic progenitors in SCL−/− embryos (65), and transgenic mice in which β-geo is driven by this enhancer have been used to identify endoglin as a novel HSC marker (7). Fine mapping demonstrated that the +19 component was sufficient for enhancer activity in transgenic mouse embryos, and biochemical characterization has shown that the +19 element is activated by a novel multiprotein complex containing Fli-1, Elf-1, and GATA-2 (26). These data suggest that this enhancer functions as a nodal point for the integration of signals responsible for establishing the transcriptional program for blood cell development. Interestingly, ES cells in which the +18/19 element was deleted from the endogenous SCL locus were still capable of forming blood cells in vitro and in vivo (23). This observation led to the characterization of a second enhancer (−4 element), which targets expression to endothelial cells and hematopoietic progenitors and which is also bound by Fli-1 and Elf-1 (23). However, several questions remain. In particular, little is known about the hematopoietic expression of other genes within the SCL locus, and it is unclear whether individual SCL enhancers also regulate the transcription of neighboring genes. Furthermore, the +18/19 and −4 elements target hematopoietic progenitors but not erythroid cells, and yet SCL itself is normally expressed in the primitive and definitive erythroid lineages. As a consequence, we have previously postulated the existence of a separate erythroid enhancer necessary for maintaining SCL expression following erythroid commitment (65). In this paper, we describe the pattern of transcription of SCL and neighboring genes in a panel of hematopoietic cell lines representing multiple lineages. We show that SCL exhibits unexpected coexpression with its downstream neighbor MAP17, suggesting that they share regulatory elements. A systematic survey of histone acetylation throughout the SCL locus resulted in identification of a novel erythroid enhancer 40 kb downstream of SCL exon 1a. This element functions as an erythroid-restricted enhancer in vitro; directs expression to primitive, but not definitive, erythroid cells in vivo; and provides a powerful tool for studying the poorly understood primitive erythroid lineage.