We have identified a cell population expressing erythroid (TER-119) and megakaryocyte (4A5) markers in the bone marrow of normal mice. This population is present at high frequency in the marrows and in the spleens involved in the erythroid expansion that occurs in mice recovering from phenylhydrazine (PHZ)-induced hemolytic anemia. TER-119(+)/4A5(+) cells were isolated from the spleen of PHZ-treated animals and were found to be blast-like benzidine-negative cells that generate erythroid and megakaryocytic cells within 24-48 hours of culture in the presence of erythropoietin (EPO) or thrombopoietin (TPO). TER-119(+)/4A5(+) cells represent a late bipotent erythroid and megakaryocytic cell precursors that may exert an important role in the recovery from PHZ-induced anemia. (Blood. 2000;95:2559-2568)