The present study examines genetic mechanism(s) possibly involved in the observed 3'-azido-3'-deoxythymidine (AZT)-induced inhibition of globin gene transcription by evaluating the direct phenotypic erythroid effects of AZT on erythroid-specific transcription factors which regulate globin gene promoters. In vitro binding of GATA-1 or NFE-2 to its consensus sequence was decreased in the presence of AZT reaching a maximum inhibition as early as 24 h after AZT treatment. Nuclear extracts from butyric acid-induced K562 cells treated with an IC50 concentration of AZT exhibited a decrease in GATA-1 and NFE-2 binding by approximately 30% and 35%. In contrast, 2',3'-dideoxycytidine which inhibits cell growth without affecting hemoglobin synthesis, had no effect on binding of GATA-1 and NFE-2 factors. Northern blot analysis revealed a 25% decrease by AZT in GATA-1 mRNA steady-state levels at 24 h and this inhibitory effect was maintained until 72 h after drug addition. A similar decrease in NFE-2 mRNA steady-state levels was observed at 72 h after AZT treatment. This study suggests that AZT inhibition of erythroid differentiation is subsequent to a decrease of nuclear factors gene expression which affect their DNA binding.