The stem cell leukemia (SCL) gene, also known as TAL-1, encodes a basic helix-loop-helix protein that is essential for the formation of all hematopoietic lineages, including primitive erythropoiesis. Appropriate transcriptional regulation is essential for the biological functions of SCL, and we have previously identified five distinct enhancers which target different subdomains of the normal SCL expression pattern. However, it is not known whether these SCL enhancers also regulate neighboring genes within the SCL locus, and the erythroid expression of SCL remains unexplained. Here, we have quantitated transcripts from SCL and neighboring genes in multiple hematopoietic cell types. Our results show striking coexpression of SCL and its immediate downstream neighbor, MAP17, suggesting that they share regulatory elements. A systematic survey of histone H3 and H4 acetylation throughout the SCL locus in different hematopoietic cell types identified several peaks of histone acetylation between SIL and MAP17, all of which corresponded to previously characterized SCL enhancers or to the MAP17 promoter. Downstream of MAP17 (and 40 kb downstream of SCL exon 1a), an additional peak of acetylation was identified in hematopoietic cells and was found to correlate with expression of SCL but not other neighboring genes. This ؉40 region is conserved in human-dog-mouse-rat sequence comparisons, functions as an erythroid cell-restricted enhancer in vitro, and directs -galactosidase expression to primitive, but not definitive, erythroblasts in transgenic mice. The SCL ؉40 enhancer provides a powerful tool for studying the molecular and cellular biology of the primitive erythroid lineage.