The transcriptional regulatory factor PU.1 is important for the regulation of a diverse group of hematopoietic and myeloid genes. Posttranslational phosphorylation of PU.1 has been demonstrated in the regulation of a variety of promoters in normal cells. In leukemia cells, differing patterns of PU.1 phosphorylation have been described among acute myelogenous leukemia (AML) subtypes. Therefore, we hypothesized that modulation of PU.1-dependent gene expression might be a molecular mediator of alterations in myeloid cell growth and differentiation that have been demonstrated to be early events in benzene-induced leukemogenesis. We found that freshly isolated human CD34(+) hematopoietic progenitor cells (HPC) exhibit multiple PU.1-DNA binding species that represent PU.1 proteins in varying degrees of phosphorylation states as determined by phosphatase treatment in combination with electrophoretic mobility shift assay (EMSA). Maturation of granulocyte and monocyte lineages is also accompanied by distinct changes in PU.1-DNA binding patterns. Experiments reveal that increasing doses of the benzene metabolite, hydroquinone (HQ) induce a time-and dose-dependent alteration in the pattern of PU.1-DNA binding in cultured human CD34(+) cells, corresponding to hyperphosphorylation of the PU.1 protein. HQ-induced alterations in PU.1-DNA binding are concomitant with a sustained immature CD34(+) phenotype and cytokine-dependent enhanced clonogenic activity in cultured human HPC. These results suggest that HQ induces a dysregulation in the external signals modulating PU.1 protein phosphorylation and this dysregulation may be an early event in the generation of benzene-induced AML.