Members of the GATA family of zinc-finger transcription factors have critical roles in a variety of cell types. GATA-1, GATA-2 and GATA-3 are required for proliferation and differentiation of several hematopoietic lineages, whereas GATA-4, GATA-5 and GATA-6 activate cardiac and endoderm gene expression programs. Two GATA cofactors have recently been identified. Friend of GATA-1 (FOG-1) interacts with GATA-1 and is expressed principally in hematopoietic lineages, whereas FOG-2 is expressed predominantly in heart and brain. Although gene targeting experiments are consistent with an essential role for FOG-1 as an activator of GATA-1 function, reporter assays in transfected cells indicate that FOG-1 and FOG-2 can act as repressors. We have cloned a Xenopus laevis homologue of FOG that is structurally most similar to FOG-1, but is expressed predominantly in heart and brain, as well as the ventral blood island and adult spleen. Ectopic expression and explant assays demonstrate that FOG proteins can act as repressors in vivo, in part through interaction with the transcriptional co-repressor, C-terminal Binding Protein (CtBP). FOG may regulate the differentiation of red blood cells by modulating expression and activity of GATA-1 and GATA-2. We propose that the FOG proteins participate in the switch from progenitor proliferation to red blood cell maturation and differentiation.