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H emoglobin (Hb) A production during red blood cell development is coordinated to minimize the deleterious effects of free α- and β-Hb subunits, which are unstable and cytotoxic. The α-Hb–stabilizing protein (AHSP) is an erythroid protein that specifically binds α-Hb and prevents its precipitation in vitro, which suggests that it may function to limit free α-Hb toxicities in vivo. We investigated this possibility through gene ablation and biochemical studies. AHSP^–/– erythrocytes contained hemoglobin precipitates and were short-lived. In hematopoietic tissues, erythroid precursors were elevated in number but exhibited increased apoptosis. Consistent with unstable α-Hb, AHSP^–/– erythrocytes contained increased ROS and evidence of oxidative damage. Moreover, purified recombinant AHSP inhibited ROS production by α-Hb in solution. Finally, loss of AHSP worsened the phenotype of β-thalassemia, a common inherited anemia characterized by excess free α-Hb. Together, the data support a model in which AHSP binds α-Hb transiently to stabilize its conformation and render it biochemically inert prior to Hb A assembly. This function is essential for normal erythropoiesis and, to a greater extent, in β-thalassemia. Our findings raise the possibility that altered AHSP expression levels could modulate the severity of β-thalassemia in humans.