The ETV6/CBFA2 (TEL/AML1) fusion gene occurs as a result of the chromosome translocation t(12;21)(p13;q22) in up to 30% of children diagnosed with B cell precursor (cd10⁺, cd19⁺) acute lymphoblastic leukemia. Leukemic cells that have acquired the t(12;21) usually demonstrate loss of the remaining normal ETV6 (TEL) allele. Using reporter gene assays we have functionally characterized both the normal ETV6 and ETV6/CBFA2 fusion proteins in the regulation of the MCSFR proximal promoter. Neither ETV6 or ETV6/CBFA2 has any significant, detectable effect on the promoter by itself. However, both ETV6 and ETV6/CBFA2 inhibit the activation of the promoter by CBFA2B(AML1B) and C/EBPa. We have shown that a 29-bp region of the MCSFR promoter containing the binding sites for CBFA2B and C/EBPa is sufficient for the inhibition by ETV6 and ETV6/CBFA2. Mutational analysis of the MCSFR promoter revealed that binding of both CBFA2B and C/EBPa to their respective sites is necessary for the inhibition by ETV6 and ETV6/CBFA2. Deletion of the helix–loop–helix (HLH) region from the cDNAs of ETV6 and ETV6/CBFA2 decreased but did not completely abrogate the ability of either construct to inhibit promoter activation. We also found that the ETS DNA binding region of ETV6 is necessary for inhibition of the promoter. Addition of ETS1 and FLI1, two ETS family members that have homology in the 5′ HLH region, but not Spi1, an ETS family member without the 5′ HLH region, also inhibited reporter gene expression. Our data show that the inhibition mediated by ETV6 and ETV6/CBFA2, in the context of the MCSFR promoter, depend on interactions with other proteins, not just CBFA2B. Our results also indicate that the transactivation characteristics of ETV6/CBFA2 are a combination of positive and negative regulatory properties.