Anemia frequently accompanies the diagnosis of acute lymphoblastic leukemia (ALL) in children and is considered to be one of the most common clinical complications of the disease. In addition, a low hemoglobin (Hb) level is often responsible for fatigue and other associated symptoms that cause a decline in the quality of life of these children. Traditionally, a number of contributing factors such as overcrowding of the marrow, coexisting infections, and nutritional deficits have been used to explain this phenomenon. However, recent advances in in vivo modeling and real-time ultrastructural analytical techniques have enabled researchers to examine leukemic bone marrow (BM) microenvironment more closely and helped to build mechanistic models of this process. Importantly, data from these studies show that in the majority of cases, the required stem cell populations and the erythropoietic growth mechanisms remain intact in leukemia. In this report, we aim to review the current state of knowledge regarding the cellular and molecular mechanisms implicated in the altered erythropoiesis at the time of diagnosis of leukemia. We propose that further understanding of the mechanisms of anemia in leukemia may help to manage some of its clinical consequences more effectively as well as to yield key insight into the process of leukemogenesis itself.