We investigated the mechanisms of hematopoietic disorders caused by iron overload and chelation, in particular, the inhibition of erythroblast differentiation. Murine c-kit(+) progenitor cells or human CD34(+) peripheral blood hematopoietic progenitors were differentiated in vitro to the erythroid lineage with free iron and/or an iron chelator. Under iron overload, formation of erythroid burst-forming unit colonies and differentiation to mature erythroblasts were significantly suppressed; these effects were canceled by iron chelation with deferoxamine (DFO). Moreover, excessive iron burden promoted apoptosis in immature erythroblasts by elevating intracellular reactive oxygen species (ROS). Interestingly, both DFO and a potent anti-oxidant agent reduced intracellular ROS levels and suppressed apoptosis, thus restoring differentiation to mature erythroblasts. Accordingly, intracellular ROS may represent a new therapeutic target in the treatment of iron overload.