We investigated the translational regulation of SCL protein expression and its role in hematopoietic lineage choice. We show that the expression of different SCL protein isoforms is regulated by signal transduction pathways that modulate translation initiation factor (eIF) function. A conserved small upstream open reading frame (uORF) in SCL transcripts acts as a cis-regulatory element for isoform expression. At the onset of erythroid differentiation, truncated SCL protein isoforms arise by alternative translation initiation and favor the erythroid lineage. In comparison, full-length SCL proteins are more efficient at enhancing the megakaryocyte lineage. Together, our studies unravel translational control as a novel mechanism regulating hematopoietic outcome.