Abstract Granulocyte–macrophage colony stimulating factor (GM-CSF) promotes the growth, survival, differentiation and activation of normal myeloid cells and is essential for fully functional macrophage differentiation in vivo. To better understand the mechanisms by which growth factors control the balance between proliferation and self-renewal versus growth-suppression and differentiation we have used the bi-potent FDB1 myeloid cell line, which proliferates in IL-3 and differentiates to granulocytes and macrophages in response to GM-CSF. This provides a manipulable model in which to dissect the switch between growth and differentiation. We show that, in the context of signaling from an activating mutant of the GM-CSF receptor β subunit, a single intracellular tyrosine residue (Y577) mediates the granulocyte fate decision. Loss of granulocyte differentiation in a Y577F second-site mutant is accompanied by enhanced macrophage differentiation and accumulation of β-catenin together with activation of Tcf4 and other Wnt target genes. These include the known macrophage lineage inducer, Egr1. We show that forced expression of Tcf4 or a stabilised β-catenin mutant is sufficient to promote macrophage differentiation in response to GM-CSF and that GM-CSF can regulate β-catenin stability, most likely via GSK3β. Consistent with this pathway being active in primary cells we show that inhibition of GSK3β activity promotes the formation of macrophage colonies at the expense of granulocyte colonies in response to GM-CSF. This study therefore identifies a novel pathway through which growth factor receptor signaling can interact with transcriptional regulators to influence lineage choice during myeloid differentiation.