Hematopoietic transcription factors are essential for specifying cell fates; however, the function of cytokines in such developmental decisions is unresolved. We demonstrate here that haploinsufficiency for the gene encoding the transcription factor PU.1 partially suppresses the neutropenia of mice deficient in granulocyte colony-stimulating factor. This suppression was due to an increase in granulocytic progenitors and a diminution of monocytic progenitors. With (PU.1+/-) ES cells as well as (PU.1-/-) hematopoietic progenitors, we show that higher expression of PU.1 is needed for macrophage than for neutrophil development. In a (PU.1-/-) progenitor cell line, in which graded activity of PU.1 regulates neutrophil versus macrophage development, granulocyte colony-stimulating factor signaling supported the neutrophil cell fate by increasing expression of the neutrophil transcription factor C/EBPalpha in relation to expression of PU.1. Collectively, these results indicate that cytokines can promote cell fate decisions by altering the relative concentrations of lineage-determining transcriptional regulators.