The transcription factor CCAAT/enhancer-binding protein alpha (C/EBPalpha) coordinates proliferation arrest and the differentiation of myeloid progenitors, adipocytes, hepatocytes, keratinocytes, and cells of the lung and placenta. C/EBPalpha transactivates lineage-specific differentiation genes and inhibits proliferation by repressing E2F-regulated genes. The myeloproliferative C/EBPalpha BRM2 mutant serves as a paradigm for recurrent human C-terminal bZIP C/EBPalpha mutations that are involved in acute myeloid leukemogenesis. BRM2 fails to repress E2F and to induce adipogenesis and granulopoiesis. The data presented here show that, independently of pocket proteins, C/EBPalpha interacts with the dimerization partner (DP) of E2F and that C/EBPalpha-E2F/DP interaction prevents both binding of C/EBPalpha to its cognate sites on DNA and transactivation of C/EBP target genes. The BRM2 mutant, in addition, exhibits enhanced interaction with E2F-DP and reduced affinity toward DNA and yet retains transactivation potential and differentiation competence that becomes exposed when E2F/DP levels are low. Our data suggest a tripartite balance between C/EBPalpha, E2F/DP, and pocket proteins in the control of proliferation, differentiation, and tumorigenesis.