MicroRNAs (miRs) play an important role in cell differentiation and maintenance of cell identity, but relatively little is known of their functional role in modulating human hematopoietic lineage differentiation. Human embryonic stem cells (hESCs) provide a model system to study early human hematopoiesis. We differentiated hESCs by embryoid body (EB) formation and compared the miR expression profile of undifferentiated hESCs to CD34(+) EB cells. miRs-126/126* were the most enriched of the 7 miRs that were up-regulated in CD34(+) cells, and their expression paralleled the kinetics of hematopoietic transcription factors RUNX1, SCL, and PU.1. To define the role of miRs-126/126* in hematopoiesis, we created hESCs overexpressing doxycycline-regulated miRs-126/126* and analyzed their hematopoietic differentiation. Induction of miRs-126/126* during both EB differentiation and colony formation reduced the number of erythroid colonies, suggesting an inhibitory role of miRs-126/126* in erythropoiesis. Protein tyrosine phosphatase, nonreceptor type 9 (PTPN9), a protein tyrosine phosphatase that is required for growth and expansion of erythroid cells, is one target of miR-126. PTPN9 restoration partially relieved the suppressed erythropoiesis caused by miRs-126/126*. Our results define an important function of miRs-126/126* in negative regulation of erythropoiesis, providing the first evidence for a role of miR in hematopoietic differentiation of hESCs.