Regulatory circuits that control stem cell fate decisions can be identified and understood by manipulating individual regulatory elements genetically. While impractical in the rare somatic stem cells of primary tissue, this approach is feasible in embryonic stem cells differentiated in vitro into the somatic stem cell type of interest. We present an improved highly efficient targeting system allowing genes to be integrated into a predetermined, doxycycline-inducible locus, and corresponding inducible embryonic stem cell lines to be generated rapidly. We apply this system to evaluate a key hematopoietic progenitor cell regulatory element, HoxB4, and its mammalian paralogs, whose effects have not yet been tested in this context. We show that all Hox paralog group 4 members, A4, B4, C4, and D4, have similar effects on hematopoietic stem and progenitor self-renewal in vitro, and thus classify Hox paralog group 4 as promoting self-renewal. Each paralog group 4 member both promotes proliferation and inhibits differentiation, enabling the exponential expansion of hematopoietic progenitors from the c-kit(+)/CD41(+) cell fraction of day 6 murine embryoid bodies. By evaluating a set of deletion mutants we show that sequences in addition to the homeodomain and hexapeptide motif are required for this activity. These results highlight the utility of this expression system to perform functional and structural analyses of genetic regulators of cell fate decisions.