Tropomodulin (Tmod) is a protein that binds and caps the pointed ends of actin filaments in erythroid and nonerythoid cell types. Targeted deletion of mouse tropomodulin3 (Tmod3) leads to embryonic lethality at E14.5-E18.5, with anemia due to defects in definitive erythropoiesis in the fetal liver. Erythroid burst-forming unit and colony-forming unit numbers are greatly reduced, indicating defects in progenitor populations. Flow cytometry of fetal liver erythroblasts shows that late-stage populations are also decreased, including reduced percentages of enucleated cells. Annexin V staining indicates increased apoptosis of Tmod3(-/-) erythroblasts, and cell-cycle analysis reveals that there are more Ter119(hi) cells in S-phase in Tmod3(-/-) embryos. Notably, enucleating Tmod3(-/-) erythroblasts are still in the process of proliferation, suggesting impaired cell-cycle exit during terminal differentiation. Tmod3(-/-) late erythroblasts often exhibit multilobular nuclear morphologies and aberrant F-actin assembly during enucleation. Furthermore, native erythroblastic island formation was impaired in Tmod3(-/-) fetal livers, with Tmod3 required in both erythroblasts and macrophages. In conclusion, disruption of Tmod3 leads to impaired definitive erythropoiesis due to reduced progenitors, impaired erythroblastic island formation, and defective erythroblast cell-cycle progression and enucleation. Tmod3-mediated actin remodeling may be required for erythroblast-macrophage adhesion, coordination of cell cycle with differentiation, and F-actin assembly and remodeling during erythroblast enucleation.