Red blood cells mature within the erythroblastic island (EI) niche that consists of specialized macrophages surrounded by differentiating erythroblasts. Here we establish an in vitro system to model the human EI niche using macrophages that are derived from human induced pluripotent stem cells (iPSCs), and are also genetically programmed to an EI-like phenotype by inducible activation of the transcription factor, KLF1. These EI-like macrophages increase the production of mature, enucleated erythroid cells from umbilical cord blood derived CD34+ haematopoietic progenitor cells and iPSCs; this enhanced production is partially retained even when the contact between progenitor cells and macrophages is inhibited, suggesting that KLF1-induced secreted proteins may be involved in this enhancement. Lastly, we find that the addition of three secreted factors, ANGPTL7, IL-33 and SERPINB2, significantly enhances the production of mature enucleated red blood cells. Our study thus contributes to the ultimate goal of replacing blood transfusion with a manufactured product.