How cell proliferation subsides as cells terminally differentiate remains largely enigmatic, although this phenomenon is central to the existence of multicellular organisms. Here, we show that GATA-1, the master transcription factor of erythropoiesis, forms a tricomplex with the retinoblastoma protein (pRb) and E2F-2. This interaction requires a LXCXE motif that is evolutionary conserved among GATA-1 orthologs yet absent from the other GATA family members. GATA-1/pRb/E2F-2 complex formation stalls cell proliferation and steers erythroid precursors towards terminal differentiation. This process can be disrupted in vitro by FOG-1, which displaces pRb/E2F-2 from GATA-1. A GATA-1 mutant unable to bind pRb fails to inhibit cell proliferation and results in mouse embryonic lethality by anemia. These findings clarify the previously suspected cell-autonomous role of pRb during erythropoiesis and may provide a unifying molecular mechanism for several mouse phenotypes and human diseases associated with GATA-1 mutations.