Signaling by the stem cell factor receptor Kit in hematopoietic stem and progenitor cells is functionally associated with the regulation of cellular proliferation, differentiation and survival. Expression of the receptor is downregulated upon terminal differentiation in most lineages, including red blood cell terminal maturation, suggesting that omission of Kit transduced signals is a prerequisite for the differentiation process to occur. However, the molecular mechanisms by which Kit signaling preserves the undifferentiated state of progenitor cells are not yet characterized in detail. In this study, we generated a mouse model for inducible expression of a Kit receptor carrying an activating mutation and studied its effects on fetal liver hematopoiesis. We found that sustained Kit signaling leads to expansion of erythroid precursors and interferes with terminal maturation beyond the erythroblast stage. Primary KIT(D816V) erythroblasts stimulated to differentiate fail to exit cell cycle and show elevated rates of apoptosis because of insufficient induction of survival factors. They further retain expression of progenitor cell associated factors c-Myc, c-Myb and GATA-2 and inefficiently upregulate erythroid transcription factors GATA-1, Klf1 and Tal1. In KIT(D816V) erythroblasts we found constitutive activation of the mitogen-activated protein kinase (MAPK) pathway, elevated expression of the src kinase family member Lyn and impaired Akt activation in response to erythropoietin. We demonstrate that the block in differentiation is partially rescued by MAPK inhibition, and completely rescued by the multikinase inhibitor Dasatinib. These results show that a crosstalk between Kit and erythropoietin receptor signaling cascades exists and that continuous Kit signaling, partly mediated by the MAPK pathway, interferes with this crosstalk.