Hematopoiesis maintains the entire blood system, and dysregulation of this process can lead to malignancies (leukemia), immunodeficiencies or red blood cell diseases (anemia, polycythemia vera). We took advantage of the zebrafish model that shares most of the genetic program involved in hematopoiesis with mammals to characterize a new gene of unknown function, si:ch73-299h12.2, which is expressed in the erythroid lineage during primitive, definitive and adult hematopoiesis. This gene, required during primitive and definitive erythropoiesis, encodes a C2H2 zinc-finger protein that inhibits BMP signaling. We therefore named this gene blood-inducing factor 1 and BMP inhibitory factor 1 (bif1). We identified a bif1 ortholog in Sinocyclocheilus rhinocerous, another fish, and in the mouse genome. Both genes also inhibit BMP signaling when overexpressed in zebrafish. In conclusion, we have deorphanized a new zebrafish gene of unknown function: bif1 codes for a zinc-finger protein that inhibits BMP signaling and also regulates primitive erythropoiesis and definitive hematopoiesis.