Background In erythroblasts, the CoREST repressor complex is recruited to target promoters by the transcription factor Gfi1b, leading to repression of genes mainly involved in erythroid differentiation. Hmg20b is a subunit of CoREST, but its role in erythropoiesis has not yet been established. Design and Methods To study the role of Hmg20b in erythropoiesis, we performed knockdown experiments in a differentiation-competent mouse fetal liver cell line, and in primary mouse fetal liver cells. The effects on globin gene expression were determined. We used microarrays to investigate global gene expression changes induced by Hmg20b knockdown. Functional analysis was carried out on Hrasls3, an Hmg20b target gene. Results We show that Hmg20b depletion induces spontaneous differentiation. To identify the target genes of Hmg20b, microarray analysis was performed on Hmg20b knockdown cells and controls. In line with its association to the CoREST complex, we found that 85% (527 out of 620) of the deregulated genes are up-regulated when Hmg20b levels are reduced. Among the few down-regulated genes was Gfi1b, a known repressor of erythroid differentiation. Among the consistently up-regulated targets were embryonic beta-like globins and the phospholipase HRAS-like suppressor 3 (Hrasls3). We show that Hrasls3 expression is induced during erythroid differentiation and that knockdown of Hrasls3 inhibits terminal differentiation of proerythroblasts. Conclusions We conclude that Hmg20b acts as an inhibitor of erythroid differentiation, through the downregulation of genes involved in differentiation such as Hrasls3, and activation of repressors of differentiation such as Gfi1b. In addition, Hmg20b suppresses embryonic beta-like globins.