A novel humanized mouse model of Cooley's Anemia (CA) was generated by targeted gene replacement in embryonic stem (ES) cells. Because the mouse does not have a true fetal hemoglobin, a delayed switching human gamma to beta(0) globin gene cassette (gammabeta(0)) was inserted directly into the murine beta globin locus replacing both adult mouse beta globin genes. The inserted human beta(0) globin allele has a mutation in the splice donor site that produces the same aberrant transcripts in mice as described in human cells. No functional human beta globin polypeptide chains are produced. Heterozygous gammabeta(0) mice suffer from microcytic anemia. Unlike previously described animal models of beta thalassemia major, homozygous gammabeta(0) mice switch from mouse embryonic globin chains to human fetal gamma globin during fetal life. When bred with human alpha globin knockin mice, homozygous CA mice survive solely upon human fetal hemoglobin at birth. This preclinical animal model of CA can be utilized to study the regulation of globin gene expression, synthesis, and switching; the reactivation of human fetal globin gene expression; and the testing of genetic and cell-based therapies for the correction of thalassemia.