Diamond Blackfan Anemia (DBA), a congenital erythroblastopenia, is a model disease for the study of erythroid differentiation, but is poorly understood. RPS19 is the only gene yet to have been associated with DBA, but the relevance of this ubiquitously expressed ribosomal gene to erythroid differentiation is unclear. Glucocorticoids are the primary pharmacological therapy for patients with DBA, but the molecular basis for the activity of glucocorticoids in erythroid differentiation has not been identified. Through retroviral expression of short hairpin RNAs (shRNAs), we demonstrate that targeted degradation of the RPS19 gene in cultured human CD34+ cells blocks the proliferation and differentiation of erythroid progenitor cells. Decreased RPS19 expression limited production of erythroid colony formation on methylcellulose, decreased cell surface expression of glycophorin-A, and decreased cellular proliferation. Treatment of RPS19 deficient cells with dexamethasone restored erythroid differentiation to normal levels. We investigated the molecular basis of pharmacologic therapies for DBA using oligonucleotide microarrays to survey gene expression in CD34+ cells treated with combinations of erythropoietin, dexamethasone, IL-3, and SCF. None of these agents had a direct effect on the expression of RPS19 or on the coordinate expression of other ribosomal genes. Instead, dexamethasone activated a genetic program that includes a set of key hematopoietic regulatory genes, including Flt-3 and PLZF, that increase proliferation of hematopoietic progenitor cells. Genes specific to erythroid progenitor cells were up-regulated by dexamethasone, while genes specific to non-erythroid lineages were powerfully down-regulated. Deficiency of RPS19 therefore blocks proliferation of immature erythroid progenitor cells, and dexamethasone activates proliferation of the same cell population through mechanisms independent of RPS19. Identification of the key regulatory genes affected by dexamethasone may aid in the development of novel therapeutics that de-couple the beneficial hematopoietic effects of dexamethasone from detrimental non-hematopoietic side effects.