PU.1 and GATA transcription factors appear to antagonize each other's function in the development of distinct lineages of the hematopoietic system. In contrast, we demonstrate that PU.1, like GATA-2, is essential for the generation of mast cells. PU.1−/− hematopoietic progenitors can be propagated in IL-3 and differentiate into mast cells or macrophages upon restoration of PU.1 activity. Using these progenitors and a conditionally activatable PU.1 protein, we show that PU.1 can negatively regulate expression of the GATA-2 gene. In the absence of GATA-2, PU.1 promotes macrophage but not mast cell differentiation. Reexpression of GATA-2 in such progenitors enables the generation of mast cells. We propose a developmental model in which cooperative function or antagonistic crossregulation by PU.1 of GATA-2 promotes distinct myeloid cell fates.