Pbx1 is the product of a proto-oncogene originally discovered at the site of chromosomal translocations in acute leukemias. It binds DNA as a complex with a broad subset of homeodomain proteins, but its contributions to hematopoiesis have not been established. This paper reports that Pbx1 is expressed in hematopoietic progenitors during murine embryonic development and that its absence results in severe anemia and embryonic lethality at embryonic day 15 (E15) or E16. Definitive myeloerythroid lineages are present in Pbx1 -/- fetal livers, but the total numbers of colony-forming cells are substantially reduced. Fetal liver hypoplasia reflects quantitative as well as qualitative defects in the most primitive multilineage progenitors and their lineage- restricted progeny. Hematopoietic stem cells from Pbx1 -/- embryos have reduced colony-forming activity and are unable to establish multilineage hematopoiesis in competitive reconstitution experiments. Common myeloid progenitors (CMPs), the earliest known myeloerythroid-restricted progenitors, are markedly depleted in Pbx1 -/- embryos at E14 and display clonogenic defects in erythroid colony formation. Comparative cell-cycle indexes suggest that these defects result largely from insufficient proliferation. Megakaryocyte-and erythrocyte-committed progenitors are also reduced in number and show decreased erythroid colony-forming potential. Taken together, these data indicate that Pbx1 is essential for the function of hematopoietic progenitors with erythropoietic potential and that its loss creates a proliferative constriction at the level of the CMP. Thus, Pbx1 is required for the maintenance, but not the initiation, of definitive hematopoiesis and contributes to the mitotic amplifications of progenitor subsets through which mature erythrocytes are generated.