The Ets family transcription factor PU.1, encoded by the gene Sfpi1, is essential for normal hematopoiesis. A number of studies have suggested that changes in PU.1 concentration play a role in directing cell fate decisions during hematopoiesis. However, the stages of hematopoietic development at which changes in PU.1 concentration are important have not been defined until recently. Experiments using conditional null alleles, reporter alleles, and hypomorphic alleles of the Sfpi1 gene in mice demonstrate that PU.1 concentration is uniformly high during early stages of hematopoietic development. However, reduction of PU.1 concentration is required for normal development of megakaryocyte-erythroid progenitors, B cell progenitors, and T cell progenitors. PU.1 concentration increases in granulocyte-macrophage progenitors. Furthermore, experimental reduction of PU.1 concentration in the myeloid lineages leads to failed differentiation, abnormal proliferation, and leukemia. In this review, we summarize recent studies to develop a new model of PU.1 function in hematopoiesis.