Erythroid Krüppel-like factor (EKLF) was originally isolated from erythroid cell RNA by differential screening and shown to be erythroid-specific, although a low level of EKLF was found in mast cell lines. EKLF contains three zinc-fingers homologous to those found in the Krüppel family of transcription factors. Because it binds the sequence CCACACCCT, EKLF may affect erythroid development as a result of its ability to bind to the CAC box in the promoter of the beta-globin gene. Mutation of this element leads to reduced beta-globin expression and it appears to mediate the effect of the globin locus control region on the promoter. Here we inactivate the EKLF gene through insertion of a lacZ reporter gene by homologous recombination in embryonic stem (ES) cells. Heterozygous EKLF+/- mice show that the reporter gene is expressed in a developmentally specific manner in all types of erythroblasts in the fetal liver and adult bone marrow. Homozygous EKLF-/- mice appear normal during the embryonic stage of haematopoiesis in the yolk sac, but develop a fatal anaemia during early fetal life when haematopoiesis has switched to the fetal liver. Enucleated erythrocytes are formed but these do not contain the proper amount of haemoglobin. We conclude that the transcription factor EKLF is essential for the final steps of definitive erythropoiesis in fetal liver.