The hematopoietic transcription factor GATA1 induces heme accumulation during erythropoiesis by directly activating genes mediating heme biosynthesis. In addition to its canonical functions as a hemoglobin prosthetic group and enzyme cofactor, heme regulates gene expression in erythroid cells both transcriptionally and post-transcriptionally. Heme binding to the transcriptional repressor BACH1 triggers its proteolytic degradation. In heme-deficient cells, BACH1 accumulates and represses transcription of target genes, including α- and β-like globin genes, preventing the accumulation of cytotoxic free globin chains. A recently described BACH1-independent mechanism of heme-dependent transcriptional regulation is associated with a DNA motif termed heme-regulated motif (HERM), which resides at the majority of loci harboring heme-regulated chromatin accessibility sites. Progress on these problems has led to a paradigm in which cell type-specific transcriptional mechanisms determine the expression of enzymes mediating the synthesis of small molecules, which generate feedback loops, converging upon the transcription factor itself and the genome. This marriage between transcription factors and the small molecules that they control is predicted to be a canonical attribute of regulatory networks governing cell state transitions such as differentiation in the hematopoietic system and more broadly.