Co-repressor N-CoR (nuclear receptor co-repressor) has important roles in different biological processes, including proliferation, differentiation and development. Mutant mice lacking N-CoR are embryonically lethal and appear to die from anemia owing to defects in definitive erythropoiesis. However, the underlying molecular mechanisms of N-CoR-mediated erythroid differentiation are largely unknown. Using the human erythroleukemic K562 cell line, which can be chemically induced to differentiate into either erythroid or megakaryocytic lineages depending on the inducers used, we have investigated the role of N-CoR in erythroid differentiation. We show that knockdown of N-CoR either transiently (siRNA) or permanently (shRNA) impairs the cytosine arabinoside (Ara-C)- but not hemin-induced erythroid differentiation of K562 cells. RT-PCR analysis reveals that N-CoR is required for induction by Ara-C of 5-aminolevulinate synthase (ALA-S2), a key enzyme involved in heme biosynthesis. Furthermore, the amount of N-CoR proteins increases significantly during Ara-C-induced K562 differentiation, apparently through a post-transcriptional mechanism. Consistent with the data from N-CoR-null mice, N-CoR is not required for the differentiation of K562 cells into megakaryocytic lineages, induced by phorbol 12-myristate 13-acetate. Thus, our in vitro study confirms a role for N-CoR in erythroid differentiation and reveals for the first time that N-CoR is required for the induction of a key enzyme involved in heme synthesis.