Transcription factor 4 (TCF4) is implicated in lymphoid cell differentiation and its expression predicts outcome in acute myeloid leukemia. Here, we investigated the role of TCF4 in myelopoiesis. Overexpression of TCF4 (TCF4OE) in umbilical cord blood (UCB) cells resulted in a twofold increase in erythroid colony forming units (CFU-Es), whereas knock-down (KD) of TCF4 (TCF4KD) caused a dramatic decrease in the number of erythroid colonies. In megakaryocyte CFUs (CFU-MKs), both TCF4KD and TCF4OE inhibited MK colony formation. TCF4 did not have an impact on granulocyte, macrophage, or granulocyte-macrophage colonies or on the proportion of MK-erythrocyte progenitors (MEPs) in culture. Because TCF4 affects erythroid/MK development and these lineages are affected in myelodysplastic syndrome (MDS), we studied the impact of TCF4 expression in this disease. MDS patients with high (≥median) TCF4 mRNA expression had higher hemoglobin (Hb) levels than MDS patients with low TCF4 expression (mean 9.0 vs. 8.55 g/dL, p = 0.02). Overall, TCF4 mRNA expression was lower in hematopoietic stem cells, common myeloid progenitors, and MEPs from MDS patients, but not in granulocyte-macrophage progenitors, compared with healthy controls. Therefore, in cell fractions with erythroid lineage potential, TCF4 is expressed less in MDS patients than in healthy controls. This correlates with the low overall Hb levels seen in MDS patients compared with healthy individuals and is consistent with the positive impact of TCF4 on erythroid development while not having impact on white colonies. These results indicate a role for TCF4 as a novel factor in erythroid-megakaryocytic differentiation.