Aberrant expression of the human homeobox-containing proto-oncogene TLX1/HOX11 inhibits hematopoietic differentiation programs in a number of murine model systems. Here, we report the establishment of a murine erythroid progenitor cell line, iEBHX1S-4, developmentally arrested by regulatable TLX1 expression. Extinction of TLX1 expression released the iEBHX1S-4 differentiation block, allowing erythropoietin-dependent acquisition of erythroid markers and hemoglobin synthesis. Coordinated activation of erythroid transcriptional networks integrated by the acetyltransferase co-activator CREB-binding protein (CBP) was suggested by bioinformatic analysis of the upstream regulatory regions of several conditionally induced iEBHX1S-4 gene sets. In accord with this notion, CBP-associated acetylation of GATA-1, an essential regulator of erythroid differentiation, increased concomitantly with TLX1 downregulation. Coimmunoprecipitation experiments and glutathione-S-transferase pull-down assays revealed that TLX1 directly binds to CBP, and confocal laser microscopy demonstrated that the two proteins partially colocalize at intranuclear sites in iEBHX1S-4 cells. Notably, the distribution of CBP in conditionally blocked iEBHX1S-4 cells partially overlapped with chromatin marked by a repressive histone methylation pattern, and downregulation of TLX1 coincided with exit of CBP from these heterochromatic regions. Thus, we propose that TLX1-mediated differentiation arrest may be achieved in part through a mechanism that involves redirection of CBP and/or its sequestration in repressive chromatin domains.