One of the commonest complications of Plasmodium falciparum malaria is the development of severe malarial anemia (SMA), which is, at least in part, due to malaria-induced suppression of erythropoiesis. Factors associated with suppression of erythropoiesis and development of SMA include accumulation of malarial pigment (hemozoin, PfHz) in bone marrow and altered production of inflammatory mediators, such as tumor necrosis factor (TNF)-α, and nitric oxide (NO). However, studies investigating the specific mechanisms responsible for inhibition of red blood cell development have been hampered by difficulties in obtaining bone marrow aspirates from infants and young children, and the lack of reliable models for examining erythroid development. As such, an in vitro model of erythropoiesis was developed using CD34+ stem cells derived from peripheral blood to examine the effects of PfHz, PfHz-stimulated peripheral blood mononuclear cell (PBMC)-conditioned media (CM-PfHz), TNF-α, and NO on erythroid cell development. PfHz only slightly suppressed erythroid cell proliferation and maturation marked by decreased expression of glycophorin A (GPA). On the other hand, CM-PfHz, TNF-α, and NO significantly inhibited erythroid cell proliferation. Furthermore, decreased proliferation in cells treated with CM-PfHz and NO was accompanied by increased apoptosis of erythropoietin-stimulated CD34+ cells. In addition, NO significantly inhibited erythroid cell maturation, whereas TNF-α did not appear to be detrimental to maturation. Collectively, our results demonstrate that PfHz suppresses erythropoiesis by acting both directly on erythroid cells, and indirectly via inflammatory mediators produced from PfHz-stimulated PBMC, including TNF-α and NO.