Monocyte differentiation involves the participation of lineage‐restricted transcription factors, although the mechanisms by which this process occurs are incompletely defined. Within the hematopoietic system, members of the Kruppel‐like family of factors (KLFs) play essential roles in erythrocyte and T lymphocyte development. Here we show that KLF4/GKLF is expressed in a monocyte‐restricted and stage‐specific pattern during myelopoiesis and functions to promote monocyte differentiation. Overexpression of KLF4 in HL‐60 cells confers the characteristics of mature monocytes. Conversely, KLF4 knockdown blocked phorbol ester‐induced monocyte differentiation. Forced expression of KLF4 in primary common myeloid progenitors (CMPs) or hematopoietic stem cells (HSCs) induced exclusive monocyte differentiation in clonogenic assays, whereas KLF4 deficiency inhibited monocyte but increased granulocyte differentiation. Mechanistic studies demonstrate that KLF4 is a target gene of PU.1. Consistently, KLF4 can rescue PU.1–/– fetal liver cells along the monocytic lineage and can activate the monocytic‐specific CD14 promoter. Thus, KLF4 is a critical regulator in the transcriptional network controlling monocyte differentiation.