The Delta-like (DLK1) gene is overexpressed in CD34+ cells from myelodysplastic syndrome (MDS) patients. DLK1 encodes an EGF-like homeotic transmembrane protein homologous to the notch/delta/serrate family. Although exogenous DLK1 promotes maintenance of murine hematopoietic stem cells, the functional effects of DLK1 overexpression in hematopoietic cells are unknown. We show that ectopically expressed DLK1 significantly inhibits differentiation and proliferation of human promyelocytic HL-60 cells. Unlike preadipocytes, where proteolytic processing of membrane-bound protein and release of a soluble form mediates differentiation inhibition, proteolytic release of the extracellular domain was not required for inhibition of hematopoietic cell differentiation. However, intracellular domain interactions were critical to this DLK1 function. We conclude that DLK1 overexpression in hematopoietic cells has important functional consequences. Our studies identify novel molecular mechanisms and indicate that DLK1 has activity both as a soluble and a transmembrane expressed protein. Our results support further investigation of the role of DLK1 in abnormal hematopoiesis in MDS.