The mechanisms controlling the differentiation of dendritic cells (DCs) remain largely unknown. Using a transcriptional profiling approach, we identified Gfi1 as a novel critical transcription factor in DC differentiation. Gfi1-/- mice showed a global reduction of myeloid and lymphoid DCs in all lymphoid organs whereas epidermal Langerhans cells were enhanced in number. In vivo, Gfi1-/- DCs showed striking phenotypic and functional alterations such as defective maturation and increased cytokine production. In vitro, Gfi1-/- hematopoietic progenitor cells were unable to develop into DCs. Instead, they differentiated into macrophages, suggesting that Gfi1 is a critical modulator of DC versus macrophage development. Analysis of hematopoietic chimeras and retrovirus-reconstituted hematopoietic progenitor cells established a cell autonomous and nonredundant role for Gfi1 in DC development. The developmental defect of Gfi1-/- progenitor cells was associated with decreased STAT3 activation. In conclusion, we have identified Gfi1 as a critical transcription factor that controls DC versus macrophage development and dissociates DC maturation and activation.