The TLX/HOX11 subfamily of divergent homeobox genes are involved in various aspects of embryogenesis and, in the case of TLX1/HOX11 and TLX3/HOX11L2, feature prominently as oncogenes in human T-cell acute lymphoblastic leukaemia. TLX1 possesses immortalising activity in a wide variety of blood cell lineages, however, the effect of this oncogene on haemopoietic cell differentiation has not been fully investigated. We therefore constitutively expressed TLX1 in murine bone marrow or fetal liver cells using retroviral transfer followed by transplantation and/or in vitro culture. TLX1 was found to dramatically alter haemopoiesis, promoting the emergence of a non-haemopoietic CD45(-) CD31(+) cell population while markedly inhibiting erythroid and granulocytic cell differentiation. To identify genetic programs perturbed by TLX1, a comparison of transcript profiles from J2E erythroid cells with and without enforced TLX1 expression was undertaken. This revealed a pattern of gene expression indicative of enhanced proliferation coupled to differentiation arrest. Of the genes identified, two, KIT and VEGFC, were found to be potential TLX1 targets based on transcriptional assays. These results demonstrate that TLX1 can act broadly to impair haemopoiesis and divert differentiation to an alternative fate. This may account for its ability to promote the pre-leukaemic state via perturbation of specific gene expression programs.