Heme-regulated eIF2α kinase (Hri) is necessary for balanced synthesis of heme and globin. In addition, Hri deficiency exacerbates the phenotypic severity of β-thalassemia intermedia in mice. Activation of Hri during heme deficiency and in β-thalassemia increases eIF2α phosphorylation and inhibits globin translation. Under endoplasmic reticulum stress and nutrient starvation, eIF2α phosphorylation also induces the Atf4 signaling pathway to mitigate stress. Although the function of Hri in regulating globin translation is well established, its role in Atf4 signaling in erythroid precursors is not known. Here, we report the role of the Hri-activated Atf4 signaling pathway in reducing oxidative stress and in promoting erythroid differentiation during erythropoiesis. On acute oxidative stress, Hri^−/− erythroblasts suffered from increased levels of reactive oxygen species (ROS) and apoptosis. During chronic iron deficiency in vivo, Hri is necessary both to reduce oxidative stress and to promote erythroid differentiation. Hri^−/− mice developed ineffective erythropoiesis during iron deficiency with inhibition of differentiation at the basophilic erythroblast stage. This inhibition is recapitulated during ex vivo differentiation of Hri^−/− fetal liver erythroid progenitors. Importantly, the Hri-eIF2αP-Atf4 pathway was activated and required for erythroid differentiation. We further demonstrate the potential of modulating Hri-eIF2αP-Atf4 signaling with chemical compounds as pharmaceutical therapies for β-thalassemia.