We previously characterized the zinc finger protein gene HZF1 [also known as ZNF16 (zinc finger protein 16)] and demonstrated its important roles in erythroid and megakaryocytic differentiation of K562 cells. In the present study, we investigated its effect on erythroid and megakaryocytic differentiation of HSPCs (haemopoietic stem/progenitor cells). We observed up-regulation of ZNF16 during erythroid and megakaryocytic differentiation of the CD34+ HSPCs, and demonstrated that ZNF16 promotes erythroid and megakaryocytic differentiation by gain-of-function and loss-of-function experiments. Using a luciferase reporter and ChIP assays ZNF16 was demonstrated to bind to the c-KIT gene promoter and inhibit its expression in K562 cells. Enforced expression and knockdown of ZNF16 down-regulated and up-regulated the expression of the c-KIT gene in K562 cells and HSPCs respectively. Significantly decreased levels of the c-Kit protein were observed following erythroid and megakaryocytic differentiation of K562 and CD34+ cells. The knockdown of c-KIT partially rescued the differentiation inhibition caused by ZNF16 knockdown. The knockdown of c-KIT also blocked the activity of the c-Raf/MEK [MAPK (mitogen-activated protein kinase)/ERK (extracellular-signal-regulated kinase) kinase]/ERK/c-Jun signal pathway and reduced further the level of HEY1 (hes-related family bHLH transcription factor with YRPW motif 1), a repressor of GATA1 (GATA-binding protein 1) transcription, which finally up-regulated the expression of GATA1, a central regulator of erythroid and megakaryocytic differentiation. In conclusion the results of the present study demonstrate that ZNF16 plays an important role in erythropoiesis and megakaryocytopoiesis via its regulation of the c-Kit/c-Raf/MEK/ERK/c-Jun/HEY1/GATA1 cascade.