The hematopoietic cell-specific ets family transcription factor PU.1 regulates many lymphoid and myeloid genes. We have determined that PU.1 is critical for lineage-specific expression of the tyrosine phosphatase CD45. CD45 is expressed exclusively in hematopoietic cells at all stages of development, except for mature red cells and platelets. Although CD45 is normally expressed in all leukocyte lineages, it is critically regulated by PU.1 only in myeloid cells. Whereas myeloid cells from PU.1 null mice failed to express CD45, lymphoid cells were CD45(+) by flow cytometry. Additionally, mRNA for CD45 was absent from PU.1-deficient myeloid cells. To understand the molecular basis for these observations, we characterized a transcriptional regulatory region of the murine CD45 gene containing exons 1a, 1b, and 2. Distinct transcriptional initiation sites for CD45 were demonstrated in T and B cells versus myeloid cells. A transcriptional initiation site in exon 1b (P1b) was principally utilized by myeloid cells. A PU.1 binding site was identified upstream of exon 1b by sequence analysis and DNA binding assays. Using this region of the CD45 locus we demonstrated that PU.1 directly transactivated reporter gene expression. Finally, retrovirus-mediated restoration of PU.1 expression to PU.1-deficient myeloid cells resulted in expression of cell surface CD45 and restored phosphatase activity, confirming the role of PU.1 in the positive regulation of this well known signaling molecule. We conclude that CD45 is regulated differentially in myeloid and lymphoid cells and that sequences critical to direct myeloid expression include a PU.1 binding site upstream of the P1b transcriptional initiation site.