The investigation of inherited disorders of erythropoiesis has elucidated many of the principles underlying the production of normal red blood cells and how this is perturbed in human disease. Congenital dyserythropoietic anemia type 1 (CDA-I) is a rare form of anemia caused by mutations in two genes of unknown function: CDAN1 and CDIN1 (previously called C15orf41), whilst in some cases, the underlying genetic abnormality is completely unknown. Consequently, the pathways affected in CDA-I remain to be discovered. In order to enable detailed analysis of this rare disorder we have validated a culture system which recapitulates all of the cardinal hematological features of CDA-I, including the formation of the pathognomonic ‘spongy’ heterochromatin seen by electron microscopy. Using a variety of cell and molecular biological approaches we discovered that erythroid cells in this condition show a delay during terminal erythroid differentiation, associated with increased proliferation and widespread changes in chromatin accessibility. We also show that the proteins encoded by CDAN1 and CDIN1 are enriched in nucleoli which are structurally and functionally abnormal in CDA-I. Together these findings provide important pointers to the pathways affected in CDA-I which for the first time can now be pursued in the tractable culture system utilized here.