Intimate interactions between multipotential hemopoietic stem cells and their microenvironment work towards redefining the identity and the differentiative fate of these primitive cells. Molecular cues delivered by the microenvironment frequently act in an instructive fashion by initiating intracellular signaling pathways that ultimately target a select group of transcription factors. These transcriptional regulators in turn trigger a cascade of genetic changes that ultimately determine the course of the cells during differentiation. Gene inactivation studies on the PU.1, Ikaros and GATA-3 genes have revealed that their encoded factors are essential for the earliest commitment step into the B and T lymphoid lineages.