A central issue in understanding the hematolymphoid system is the generation of appropriate mutant alleles in mice to reveal the function of regulatory genes. Here we describe a mouse strain, Plastic, with a point mutation in a zinc finger of Ikaros that disrupts DNA binding but preserves efficient assembly of the full-length protein into higher order complexes. Ikaros^Plastic homozygosity is embryonically lethal with severe defects in terminal erythrocyte and granulocyte differentiation, excessive macrophage formation, and blocked lymphopoiesis, while heterozygotes display a partial block in lymphocyte differentiation. The contrast with more circumscribed effects of Ikaros alleles that ablate the full-length protein highlights the importance in mammals of generating recessive niche-filling alleles that inactivate function without creating a void in multimolecular assemblies.