CCAAT/enhancer-binding protein epsilon (C/EBPepsilon) plays a critical role in terminal myeloid differentiation. Differentiation is an integrated process of cell cycle arrest, morphological change, functional maturation, and apoptosis. However, the molecular networks underlying these events in C/EBPepsilon-induced differentiation remain poorly understood. To reveal these mechanisms, we performed a detailed molecular analysis of C/EBPepsilon-induced differentiation using an inducible form of C/EBPepsilon. The activation of C/EBPepsilon induced growth arrest, morphological differentiation, the expression of CD11b and secondary granule proteins, and apoptosis in myeloid cell lines. Unlike C/EBPalpha, C/EBPepsilon dramatically up-regulated p27 with a concomitant down-regulation of cdk4/6 and cyclin D2/A/E. Moreover, the anti-apoptotic proteins Bcl-2 and Bcl-x were down-regulated, whereas pro-apoptotic protein Bax remained unchanged. Using a variety of mutants, we revealed that these events were all regulated by the N-terminal activation domain of C/EBPepsilon. Interestingly, some of the differentiation processes such as the induction of secondary granule protein genes were clearly inhibited by c-Myc; however, inhibition of apoptosis by Bcl-x did not affect the entire differentiation processes. These data indicate the N terminus of C/EBPepsilon to be solely responsible for most aspects of myeloid differentiation, and these events were differentially affected by c-Myc.