T-cell acute lymphoblastic leukemia (T-ALL) protein 1 (TAL1) is a central transcription factor in hematopoiesis. The timing and level of TAL1 expression orchestrate the differentiation to specialized blood cells and its overexpression is a common cause of T-ALL. Here, we studied the 2 protein isoforms of TAL1, short and long, which are generated by the use of alternative promoters as well as by alternative splicing. We analyzed the expression of each isoform by deleting an enhancer or insulator, or by opening chromatin at the enhancer location. Our results show that each enhancer promotes expression from a specific TAL1 promoter. Expression from a specific promoter gives rise to a unique 5′ UTR with differential regulation of translation. Moreover, our study suggests that the enhancers regulate TAL1 exon 3 alternative splicing by inducing changes in the chromatin at the splice site, which we demonstrate is mediated by KMT2B. Furthermore, our results indicate that TAL1-short binds more strongly to TAL1 E-protein partners and functions as a stronger transcription factor than TAL1-long. Specifically TAL1-short has a unique transcription signature promoting apoptosis. Finally, when we expressed both isoforms in mice bone marrow, we found that while overexpression of both isoforms prevents lymphoid differentiation, expression of TAL1-short alone leads to hematopoietic stem cell exhaustion. Furthermore, we found that TAL1-short promoted erythropoiesis and reduced cell survival in the CML cell line K562. While TAL1 and its partners are considered promising therapeutic targets in the treatment of T-ALL, our results show that TAL1-short could act as a tumor suppressor and suggest that altering TAL1 isoform’s ratio could be a preferred therapeutic approach.