DNA damage threatens the integrity of hematopoietic stem cells (HSCs) and the production of blood. Over the last 10 years, a wealth of genetic and functional research has shown that simple reactive aldehydes such as formaldehyde are potent genotoxins to HSCs. Mammals have evolved a two-tier protection mechanism against aldehydes, consisting of aldehyde detoxification enzymes (tier one), and the Fanconi Anemia (FA) DNA repair pathway (tier two) to process any aldehyde-induced DNA damage. Loss of either tier of protection in humans results in defective hematopoiesis and predisposition to leukemia. This review will focus on the impact of aldehydes on hematopoiesis, how they cause DNA damage, the sources of endogenous aldehydes and potential novel protective pathways.