Fanconi anemia (FA) is a pleiotropic inherited disease that causes bone marrow failure in children. However, the specific involvement of FA genes in hematopoiesis and their relation to bone marrow (BM) failure is still unclear. The increased sensitivity of FA cells to DNA cross-linking agents such as mitomycin C (MMC) and diepoxybutane (DEB), including the induction of chromosomal aberrations and delay in the G2 phase of the cell cycle, have suggested a role for the FA genes in DNA repair, cell cycle regulation, and apoptosis. We previously reported the cloning of the FA group C gene (FAC) and the generation of a Fac mouse model. Surprisingly, the Fac −/− mice did not show any of the hematologic defects found in FA patients. To better understand the relationship of FA gene functions to BM failure, we have analyzed the in vivo effect of an FA-specific DNA damaging agent in Fac −/− mice. The mice were found to be highly sensitive to DNA cross-linking agents; acute exposure to MMC produced a marked BM hypoplasia and degeneration of proliferative tissues and caused death within a few days of treatment. However, sequential, nonlethal doses of MMC caused a progressive decrease in all peripheral blood parameters of Fac −/− mice. This treatment targeted specifically the BM compartment, with no effect on other proliferative tissues. The progressive pancytopenia resulted from a reduction in the number of early and committed hematopoietic progenitors. These results indicate that the FA genes are involved in the physiologic response of hematopoietic progenitor cells to DNA damage.