GATA1 mutations are tightly associated with transient myeloproliferative disorder (TMD) and acute megakaryoblstic leukemia (AMKL) in children with Down syndrome. Numerous genes are altered in GATA-1-deficient megakaryocytes, which may contribute to the hyperproliferation and abnormal terminal differentiation of these malignant cells. In this study, we demonstrate that Pstpip2 is a GATA-1-repressed gene that controls megakaryopoiesis. Ectopic expression of PSTPIP2 impaired megakaryocytic differentiation as evidenced by a decrease of CD41 expression and reduced DNA content in K562 cells. PSTPIP2 overexpression also caused enhanced activation of Src family kinases and subsequently reduced ERK phosphorylation. Consistently, PSTPIP2 knockdown showed the opposite effect on differentiation and signaling. Moreover, the W232A mutant of PSTPIP2, defective in its interaction with PEST family phosphatases that recruit c-Src terminal kinase (CSK) to suppress Src family kinases, failed to inhibit differentiation and lost its ability to enhance Src family kinases or reduce ERK phosphorylation. In fact, the W232A mutant of PSTPIP2 promoted megakaryocyte differentiation. These observations suggest that PSTPIP2 recruiting PEST phosphatases somehow blocked CSK activity and led to enhanced activation of Src family kinases and reduced ERK phosphorylation, which ultimately repressed megakaryocyte differentiation. Supporting this idea, PSTPIP2 interacted with LYN and the expression of a dominant negative LYN (LYN DN) overwhelmed the inhibitory effect of PSTPIP2 on differentiation and ERK signaling. In addition, a constitutively active LYN (LYN CA) normalized the enhanced megakaryocyte differentiation and repressed ERK signaling in PSTPIP2 knockdown cells. Finally, we found that PSTPIP2 repressed ERK signaling, differentiation, and proliferation and verified that PSTPIP2 upregulation repressed megakaryocyte development in primary mouse bone marrow cells. Our study thus reveals a novel mechanism by which dysregulation of PSTPIP2 due to GATA-1 deficiency may contribute to abnormal megakaryocyte proliferation and differentiation in pathogenesis of related diseases.