Heme is a complex of iron with protoporphyrin IX that is essential for the function of all aerobic cells. However, if left unguarded, non-protein-bound heme promotes free radical formation, resulting in cell damage and tissue injury. The highest amounts of organismal heme (75–80%) are present in circulating red blood cells (RBC) whose precursors synthesize heme with rates that are at least 1 order of magnitude higher than those in the liver (on the per cell basis), which is the second most active heme producer in the body. The only physiological mechanism of heme degradation is performed by heme oxygenases (HO1 and HO2), which catalyze the rate-limiting step in the oxidative degradation of heme and are, therefore, involved in the control of cellular heme levels. Red blood cells contain the majority of heme destined for catabolism; this process takes place in splenic and hepatic macrophages following erythrophagocytosis of senescent RBC. Although the heme-inducible HO isoform, HO1, has been extensively studied in hepatocytes and many other non-erythroid cells, virtually nothing is known about the expression of HO1 in developing RBC. Similarly, it is unknown whether HO-1 plays any role in erythroid cell development under physiological or pathophysiological conditions. In this study we have shown that HO1 protein is expressed in uninduced murine erythroleukemic (MEL) cells and that its levels, somewhat surprisingly, do not decrease during DMSO-induced erythroid differentiation. Moreover, we demonstrated that heme significantly induces HO1 in both uninduced and induced MEL cells. Additionally, we investigated the effect of overexpressed HO1 on heme and iron metabolism in stably transfected MEL cells (MEL-HO1) and their non-transfected counterparts. Compared to wild type cells, DMSO-treated MEL-HO1 cells displayed a reduction in heme stability (measured by the incorporation of 59Fe into heme) in addition to impairment of erythroid differentiation. Moreover, although wild type and transfected cells expressed similar levels of transferrin receptors in the uninduced state, MEL-HO1 cells, as compared to wild type MEL cells, showed only a small increase in transferrin receptors upon treatment with DMSO. Finally, we measured apoptosis using annexin-V and observed an increase in the number of apoptotic cells in HO1 transfectants, but not in wild type MEL cells. These results suggest that an as yet unknown mechanism exists to protect heme against endogenous HO1 action during physiological erythroid differentiation. In addition, our results showing that high levels of HO1 in erythroid cells cause heme catabolism and a defect in erythroid differentiation raise the possibility that HO1 could play a role in some pathophysiological conditions such as unbalanced globin synthesis in thalassemias.