A comprehensive understanding of the genes and pathways regulating hematopoiesis is needed to identify genes causally related to bone marrow failure syndromes, myelodysplastic syndromes, and hematopoietic neoplasms. To identify novel genes involved in hematopoiesis, we performed an ethyl-nitrosourea mutagenesis screen in zebrafish (Danio rerio) to search for mutants with defective definitive hematopoiesis. We report the recovery and analysis of the grechetto mutant, which harbors an inactivating mutation in cleavage and polyadenylation specificity factor 1 (cpsf1), a gene ubiquitously expressed and required for 3' untranslated region processing of a subset of pre-mRNAs. grechetto mutants undergo normal primitive hematopoiesis and specify appropriate numbers of definitive HSCs at 36 hours postfertilization. However, when HSCs migrate to the caudal hematopoietic tissue at 3 days postfertilization, their numbers start decreasing as a result of apoptotic cell death. Consistent with Cpsf1 function, c-myb:EGFP(+) cells in grechetto mutants also show defective polyadenylation of snrnp70, a gene required for HSC development. By 5 days postfertilization, definitive hematopoiesis is compromised and severely decreased blood cell numbers are observed across the myeloid, erythroid, and lymphoid cell lineages. These studies show that cpsf1 is essential for HSC survival and differentiation in caudal hematopoietic tissue.