Hemoglobin (Hb) A production during red blood cell development is coordinated to minimize the deleterious effects of free alpha- and beta-Hb subunits, which are unstable and cytotoxic. The alpha-Hb-stabilizing protein (AHSP) is an erythroid protein that specifically binds alpha-Hb and prevents its precipitation in vitro, which suggests that it may function to limit free alpha-Hb toxicities in vivo. We investigated this possibility through gene ablation and biochemical studies. AHSP(-/-) erythrocytes contained hemoglobin precipitates and were short-lived. In hematopoietic tissues, erythroid precursors were elevated in number but exhibited increased apoptosis. Consistent with unstable alpha-Hb, AHSP(-/-) erythrocytes contained increased ROS and evidence of oxidative damage. Moreover, purified recombinant AHSP inhibited ROS production by alpha-Hb in solution. Finally, loss of AHSP worsened the phenotype of beta-thalassemia, a common inherited anemia characterized by excess free alpha-Hb. Together, the data support a model in which AHSP binds alpha-Hb transiently to stabilize its conformation and render it biochemically inert prior to Hb A assembly. This function is essential for normal erythropoiesis and, to a greater extent, in beta-thalassemia. Our findings raise the possibility that altered AHSP expression levels could modulate the severity of beta-thalassemia in humans.