The Krüppel-like transcription factors KLF1 and KLF2 are essential for embryonic erythropoiesis. They can partially compensate for each other during mouse development, and coordinately regulate numerous erythroid genes, including the b-like globins. Simultaneous ablation of KLF1 and KLF2 results in earlier embryonic lethality and severe anemia. In this study, we determine that this anemia is caused by a paucity of blood cells, and exacerbated by diminished b-like globin gene expression. The anemia phenotype is dose-dependent, and, interestingly, can be ameliorated by a single copy of the KLF2, but not the KLF1 gene. The roles of KLF1 and KLF2 in maintaining normal peripheral blood cell numbers and globin mRNA amounts are erythroid cell-specific. Mechanistic studies led to the discovery that KLF2 has an essential function in erythroid precursor maintenance. KLF1 can partially compensate for KLF2 in this role, but is uniquely crucial for erythroid precursor proliferation through its regulation of G1-to S-phase cell cycle transition. A more drastic impairment of primitive erythroid colony formation from embryonic progenitor cells occurs with simultaneous loss of KLF1 and KLF2 than with loss of a single factor. KLF1 and KLF2 coordinately regulate several proliferation-associated genes, including Foxm1. Differential expression of FoxM1, in particular, correlates with the observed KLF1 and KLF2 gene dosage effects on anemia. Furthermore, KLF1 binds to the FoxM1 gene promoter in blood cells. Thus KLF1 and KLF2 coordinately regulate embryonic erythroid precursor maturation through the regulation of multiple homeostasis-associated genes, and KLF2 has a novel and essential role in this process.