Ras signaling plays an important role in erythropoiesis. Its function has been extensively studied in erythroid and nonerythroid cell lines as well as in primary erythroblasts, but inconclusive results using conventional erythroid colony-forming unit (CFU-E) assays have been obtained concerning the role of Ras signaling in erythroid differentiation. Here we describe a novel culture system that supports terminal fetal liver erythroblast proliferation and differentiation and that closely recapitulates erythroid development in vivo. Erythroid differentiation is monitored step by step and quantitatively by a flow cytometry analysis; this analysis distinguishes CD71 and TER119 double-stained erythroblasts into different stages of differentiation. To study the role of Ras signaling in erythroid differentiation, different H-ras proteins were expressed in CFU-E progenitors and early erythroblasts with the use of a bicistronic retroviral system, and their effects on CFU-E colony formation and erythroid differentiation were analyzed. Only oncogenic H-ras, not dominant-negative H-ras, reduced CFU-E colony formation. Analysis of infected erythroblasts in our newly developed system showed that oncogenic H-ras blocks terminal erythroid differentiation, but not through promoting apoptosis of terminally differentiated erythroid cells. Rather, oncogenic H-ras promotes abnormal proliferation of CFU-E progenitors and early erythroblasts and supports their erythropoietin (Epo)–independent growth.