To study the control of hematopoietic cell differentiation, a human negative differentiation regulator (NDR) gene was identified by the comparative analysis of differentially expressed genes in hemato-lymphoid tissues. NDR is expressed preferentially in the adult bone marrow, fetal liver and testis. Immunocytochemistry with anti-NDR antiserum showed the presence of NDR in human erythroleukemia K562 cell line and CD34+ cells sorted from the umbilical cord blood. When fused to the green fluorescent protein (GFP), NDR was directed to the nucleus of mouse 3T3 and K562 cells. Fusion protein with a deletion from residues 7 to 87 was detected in the cytoplasm. NDR appeared not to affect the proliferation of K562 cells when overly expressed. However, its expression was down-regulated during megakaryocytic differentiation of K562 cells induced by 12-O-tetradecanoylphorbol-13-acetate (TPA). Down-regulation of NDR correlated well with up-regulation of megakaryocytic markers, CD41 and CD61. Overexpression of the nuclear NDR-GFP in K562 cells inhibited the expression of CD41 and CD61 in megakaryocytic differentiation. Treatment of K562 cells with GF-109203X (GFX), an antagonist of the protein kinase C (PKC), blocked NDR down-regulation, up-regulated expression of CD41/CD61 and TPA-induced megakaryocytic differentiation. These results suggest a novel function of nuclear NDR protein in regulating hematopoietic cell development.