The limited proliferative capacity of erythroid precursors is a major obstacle to generate sufficient numbers of in vitro-derived red blood cells (RBC) for clinical purposes. We and others have determined that BMI1, a member of the polycomb repressive complex 1 (PRC1), is both necessary and sufficient to drive extensive proliferation of self-renewing erythroblasts (SREs). However, the mechanisms of BMI1 action remain poorly understood. BMI1 overexpression led to 10 billion-fold increase BMI1-induced (i)SRE self-renewal. Despite prolonged culture and BMI1 overexpression, human iSREs can terminally mature and agglutinate with typing reagent monoclonal antibodies against conventional RBC antigens. BMI1 and RING1B occupancy, along with repressive histone marks, were identified at known BMI1 target genes, including the INK-ARF locus, consistent with an altered cell cycle following BMI1 inhibition. We also identified upregulated BMI1 target genes with low repressive histone modifications, including key regulator of cholesterol homeostasis. Functional studies suggest that both cholesterol import and synthesis are essential for BMI1-associated self-renewal. These findings support the hypothesis that BMI1 regulates erythroid self-renewal not only through gene repression but also through gene activation and offer a strategy to expand the pool of immature erythroid precursors for eventual clinical uses.