Friend leukemia virus-induced erythroleukemia-1 (Fli-1), an E26 transformation specific (ETS) transcription factor, was isolated a quarter century ago through a retrovirus mutagenesis screen. Fli-1 has since been recognized to play critical roles in normal development and homeostasis. For example, it transcriptionally regulates genes that drive normal hematopoiesis and vasculogenesis. Indeed, Fli-1 is one of 10 key regulators of hematopoietic stem/progenitor cell maintenance and differentiation. Aberrant expression of Fli-1 also underlies a number of virally induced leukemias, including Friend virus-induced erythroleukemia and various types of human cancers, and it is the target of chromosomal translocations in childhood Ewing's sarcoma. Abnormal expression of Fli-1 is important in the etiology of autoimmune diseases such as systemic lupus erythematosus and systemic sclerosis. These studies establish Fli-1 as a strong candidate for drug development. Despite difficulties in targeting transcription factors, recent studies identified small-molecule inhibitors for Fli-1. Here we review past and ongoing research on Fli-1 with emphasis on its mechanistic function in autoimmune disease and malignant transformation. The significance of identifying Fli-1 inhibitors and their clinical applications for treatment of disease and cancer with deregulated Fli-1 expression are discussed.