Suppression of a cellular differentiation program by phorbol esters coincides with inhibition of binding of a cell-specific transcription factor (NF-E2) to an enhancer element required for expression of an erythroid-specific gene. Induction by hemin increases, while induction with 12-O-tetradecanoylphorbol-13-acetate (TPA) represses, erythroid-specific gene expression in the human cell line K562. We analyzed the effects of hemin or TPA induction on the binding and activity of transcription factors at a regulatory element found within the transcriptional regulatory sequences of many erythroid-specific genes. TPA induction increases the binding of ubiquitous AP-1 factors to this element. TPA induction inhibits the binding of the lineage limited transcription factor NF-E2 to this transcriptional control element. Hemin induction of K562 cells does not facilitate the binding of NF-E2 to its recognition site. Hemin induction appears to nonspecifically increase the expression of transiently transfected genes in K562 cells. Beyond this nonspecific increase in gene expression, hemin induction acts to increase the activity of the lineage limited transcription factor NF-E2. The divergent effects of hemin and TPA on gene expression in K562 cells are mediated, in part, by their contrasting effects on the transcription factor NF-E2.