The Ets transcription factor Spi-C, expressed in B cells and macrophages, is closely related to PU.1 and has the ability to recognize the same DNA consensus sequence. However, the function of Spi-C has yet to be determined. The purpose of this study is to further examine Spi-C activity in B cell development. First, using retroviral vectors to infect PU.1(-/-) fetal liver progenitors, Spi-C was found to be inefficient at inducing cytokine-dependent proliferation and differentiation of progenitor B (pro-B) cells or macrophages relative to PU.1 or Spi-B. Next, Spi-C was ectopically expressed in fetal liver-derived, IL-7-dependent pro-B cell lines. Wild-type (WT) pro-B cells ectopically expressing Spi-C (WT-Spi-C) have several phenotypic characteristics of pre-B cells such as increased CD25 and decreased c-Kit surface expression. In addition, WT-Spi-C pro-B cells express increased levels of IgH sterile transcripts and reduced levels of expression and transcription of the FcgammaRIIb gene. Gel-shift analysis suggests that Spi-C, ectopically expressed in pro-B cells, can bind PU.1 consensus sites in the IgH intronic enhancer and FcgammaRIIb promoter. Transient transfection analysis demonstrated that PU.1 functions to repress the IgH intronic enhancer and activate the FcgammaRIIb promoter, while Spi-C opposes these activities. WT-Spi-C pro-B cells have reduced levels of dimethylation on lysine 9 of histone H3 within the IgH 3' regulatory region, indicating that Spi-C can contribute to removal of repressive features in the IgH locus. Overall, these studies suggest that Spi-C may promote B cell differentiation by modulating the activity of PU.1-dependent genes.