Hydrops fetalis is commonly due to Hb Bart’s (γ4) disease in South East Asia. Here, we report an unusual case of hydrops fetalis due to congenital dyserythropoietic anemia (CDA) associated with compound heterozygosity for Krüppel-like factor 1 (KLF1) gene mutations. Fetal cardiomegaly was first detected on routine mid-trimester scan in a pregnant woman with normal mean corpuscular volume (MCV) and Rhesus positive status. The fetus subsequently developed hydrops fetalis, and cordocentesis showed severe fetal anemia with a hemoglobin (Hb) level of 3.4 g/dL. Common causes of fetal anemia including Hb Bart’s disease, parvovirus infection, and red cell antibodies were excluded. In view of the marked increase in erythroblasts at various stages of erythropoiesis, the diagnosis of CDA was suspected. We screened the couple for previously reported KLF1 gene mutations, showing that the mother was heterozygous for the c.525_526insCGGCGCC, p.Gly176Argfs*179 mutation, and her husband heterozygous for c.1012C>A, p.Pro338Thr mutation. The fetus was a compound heterozygote for these two KLF1 mutations. After counseling, repeated intrauterine transfusions were given at 27, 29, and 34 weeks’ gestation; the hydrops fetalis was resolved. The baby was delivered at 34 weeks’ gestation and required monthly blood transfusions but was otherwise thriving. Bone marrow aspiration at 10 months of age showed the features of ineffective erythropoiesis, compatible with CDA. In conclusion, hydrops fetalis can rarely be due to CDA associated with a compound heterozygous mutation for KLF1 gene mutations, and be managed by repeated intrauterine transfusions. Our present report adds to the wide clinical spectrum of KLF1 mutations.