The E26 and avian erythroblastosis virus (AEV) avian retroviruses induce acute leukemia in chickens. E26 can block both erythroid and myeloid differentiation at an early multipotent stage. Moreover, E26 can block erythroid differentiation at the erythroid burst-forming unit/erythroid CFU (BFU-E/CFU-E) stage, which also corresponds to the differentiation stage blocked by AEV. AEV carries two oncogenes, v-erbA and v-erbB, whereas E26 encodes a single 135-kDa Gag-Myb-Ets fusion oncoprotein. v-ErbA is responsible for the erythroid differentiation arrest through negative interferences with both the retinoic acid receptor (RAR) and the thyroid hormone receptor (T3R/c-ErbA). We investigated whether Myb-Ets could block erythroid differentiation in a manner similar to v-ErbA. We show here that Myb-Ets inhibits both RAR and c-ErbA activities on specific hormone response elements in transient-expression assays. Moreover, Myb-Ets abrogates the inactivation of transcription factor AP-1 by RAR and T3R, another feature shared with v-ErbA. Myb-Ets also antagonizes the biological response of erythrocytic progenitor cells to retinoic acid and T3. Analysis of a series of mutants of Myb-Ets reveals that the domains of the oncoprotein involved in these inhibitory activities are the same as those involved in oncogenic transformation of hematopoietic cells. These data demonstrate that the Myb-Ets oncoprotein shares properties with the v-ErbA oncoprotein and that inhibition of ligand-dependent RAR and c-ErbA functions by Myb-Ets is responsible for blocking the differentiation of hematopoietic progenitors.