E2A is a member of the E-protein family of transcription factors. Previous studies have reported context-dependent regulation of E2A-dependent transcription. For example, whereas the E2A portion of the E2A-Pbx1 leukemia fusion protein mediates robust transcriptional activation in t(1;19) acute lymphoblastic leukemia, the transcriptional activity of wild-type E2A is silenced by high levels of corepressors, such as the AML1-ETO fusion protein in t(8;21) acute myeloid leukemia and ETO-2 in hematopoietic cells. Here, we show that, unlike the HEB E-protein, the activation domain 1 (AD1) of E2A has specifically reduced corepressor interaction due to E2A-specific amino acid changes in the p300/CBP and ETO target motif. Replacing E2A-AD1 with HEB-AD1 abolished the ability of E2A-Pbx1 to activate target genes and to induce cell transformation. On the other hand, the weak E2A-AD1-corepressor interaction imposes a critical importance on another ETO-interacting domain, downstream ETO-interacting sequence (DES), for corepressor-mediated repression. Deletion of DES abrogates silencing of E2A activity by AML1-ETO in t(8;21) leukemia cells or by ETO-2 in normal hematopoietic cells. Our results reveal an E2A-specific mechanism important for its context-dependent activation and repression function, and provide the first evidence for the differential involvement of E2A-corepressor interactions in distinct leukemogenic pathways.