The lineage-restricted transcription factor GATA-1 is required for differentiation of erythroid and megakaryocytic cells. We have localized a 317 base pair cis-acting regulatory element, HS I, associated with a hematopoietic-specific DNase I hypersensitive site, which lies approx. 3.7 kilobases upstream of the murine hematopoietic-specific GATA-1 IE promoter. HS I directs high-level expression of reporter GATA-1/lacZ genes to primitive and definitive erythroid cells and megakaryocytes in transgenic mice. Comparative sequence analysis of HS I between human and mouse shows approx. 63% nucleotide identity with a more conserved core of 169 base pairs (86% identity). This core contains a GATA site separated by 10 base pairs from an E-box motif. The composite motif binds a multi-protein hematopoietic-specific transcription factor complex which includes GATA-1, SCL/tal-1, E2A, Lmo2 and Ldb-1. Point mutations of the GATA site abolishes HS I function, whereas mutation of the E-box motif still allows reporter gene expression in both lineages. Strict dependence of HS I activity on a GATA site implies that assembly of a protein complex containing a GATA-factor, presumably GATA-1 or GATA-2, is critical to activating or maintaining its function. Further dissection of the 317 base pair region demonstrates that, whereas all 317 base pairs are required for expression in megakaryocytes, only the 5' 62 base pairs are needed for erythroid-specific reporter expression. These findings demonstrate differential lineage requirements for expression within the HS I element.