A unique combination of growth promoting factors is described that allows growth of large amounts (10(10)-10(11)) of normal erythroid progenitors from chick bone marrow. These erythroid progenitors express the estrogen receptor (ER) as well as the receptor tyrosine kinase TGF alpha R/c-erbB. They require both TGF alpha and estradiol for sustained self-renewal in vitro, but terminally differentiate upon withdrawal of TGF alpha and inactivation of the ER by an antagonist (ICI 164.384). Overexpression of the human ER in erythroblasts devoid of endogenous ER revealed that the hormone-activated ER alone arrested erythroid differentiation and repressed a large group of erythrocyte genes. When similarly overexpressed, TGF alpha R/c-erbB inhibited the expression of a distinct, but overlapping, set of genes. The endogenous ER and TGF alpha R/c-erbB affect erythrocyte gene expression in a similar, but less pronounced fashion. Surprisingly, suppression of ER function by antagonist efficiently inhibited erythroblast transformation by tyrosine kinase oncogenes, suggesting a role of the endogenous ER in leukemogenesis. We speculate that the oncogenes v-erbB and v-erbA cooperate in erythroleukemia induction by a mechanism that is employed by TGF alpha R/c-erbB and ER to regulate normal progenitor self-renewal in response to external signals.