Hypoxic stress plays a role in pathophysiologic states such as myocardial infarction and cerebral vascular events as well as in normal physiologic conditions including development and hematopoiesis. Members of the hypoxia inducible factor (HIF) family function as transcriptional regulators of genes involved in the hypoxic response. After generating adult mice that globally lack endothelial PAS domain protein 1 (EPAS1, also known as HIF-2alpha/HRF/HLF/MOP3), the second member of the HIF family, characterization of the hematopoietic cell population indicated that the loss of EPAS1/HIF-2alpha resulted in pancytopenia. Using bone marrow reconstitution experiments of lethally irradiated hosts, we have defined the extent and site of hematopoietic impairment in the EPAS1/HIF-2alpha null mice. These data suggest a critical role for EPAS1/HIF-2alpha in maintaining a functional microenvironment in the bone marrow for effective hematopoiesis.