Hemopoietic lineage switch (Hls) 5 and 7 were originally isolated as genes up-regulated during an erythroid-to-myeloid lineage switch. We have shown previously that Hls7/Mlf1 imposes a monoblastoid phenotype on erythroleukemic cells. Here we show that Hls5 impedes erythroid maturation by restricting proliferation and inhibiting hemoglobin synthesis; however, Hls5 does not influence the morphology of erythroid cells. Under the influence of GATA-1, Hls5 relocates from cytoplasmic granules to the nucleus where it associates with both FOG-1 and GATA-1. In the nucleus, Hls5 is able to suppress GATA-1-mediated transactivation and reduce GATA-1 binding to DNA. We conclude that Hls5 and Hls7/Mlf1 act cooperatively to induce biochemical and phenotypic changes associated with erythroid/myeloid lineage switching.