Aneuploidy is one of the hallmarks of cancer. Acquired additions of chromosome 21 are a common finding in leukemias, suggesting a contributory role to leukemogenesis. About 10% of patients with a germ line trisomy 21 (Down syndrome) are born with transient megakaryoblastic leukemia. We and others have shown acquired mutations in the X chromosome gene GATA1 in all these cases. The gene or genes on chromosome 21 whose overexpression promote the megakaryoblastic phenotype are presently unknown. We propose that ERG, an Ets transcription factor situated on chromosome 21, is one such candidate. We show that ERG is expressed in hematopoietic stem cells, megakaryoblastic cell lines, and in primary leukemic cells from Down syndrome patients. ERG expression is induced upon megakaryocytic differentiation of the erythroleukemia cell lines K562 and UT-7, and forced expression of ERG in K562 cells induces erythroid to megakaryoblastic phenotypic switch. We also show that ERG activates the gpIb megakaryocytic promoter and binds the gpIIb promoter in vivo. Furthermore, both ERG and ETS2 bind in vivo the hematopoietic enhancer of SCL/TAL1, a key regulator of hematopoietic stem cell and megakaryocytic development. We propose that trisomy 21 facilitates the occurrence of megakaryoblastic leukemias through a shift toward the megakaryoblastic lineage caused by the excess expression of ERG, and possibly by other chromosome 21 genes, such as RUNX1 and ETS2, in hematopoietic progenitor cells, coupled with a differentiation arrest caused by the acquisition of mutations in GATA1.