DNA binding by the CCAAT-displacement protein, the mammalian homologue of the Drosophila melanogaster Cut protein, was previously found to increase sharply in S phase, suggesting a role for CDP/Cut in cell cycle progression. Genetic studies in Drosophila indicated that cut plays an important role in cell-type specification in several tissues. In the present study, we have investigated CDP/Cut expression and activity in a panel of multipotent hematopoietic cell lines that can be induced to differentiate in vitro into distinct cell types. While CDP/Cut DNA binding activity declined in the pathways leading to macrophages, granulocytes and erythrocytes, it remained elevated in megakaryocytes. CDP/Cut was also highly expressed in primary megakaryocytes isolated from mouse, and some DNA binding activity could be detected. Altogether, these results raise the possibility that CDP/Cut may be a determinant of cell type identity downstream of the myelo-erythroid precursor cell. Another possibility, which does not exclude a role in lineage identity, is that CDP/Cut activity in megakaryocytes is linked to endomitosis. Indeed, elevated CDP/Cut activity in differentiating megakaryocytes and during the S phase of the cell cycle suggests that it may be required for DNA replication.