Erythropoiesis is a tightly regulated process involving rapid cell proliferation with orderly differentiation to ensure production of millions of RBCs. TGF-β1 is a key regulator of erythropoiesis, however, the mechanisms via which it regulates erythropoiesis are not well elucidated. Using myelodysplastic syndromes patient samples, we show that elevated TGF-β1 and SMAD2 signaling correlates with the degree of anemia. Functional studies in primary human HSPCs demonstrate that TGF-β1 exerts a bifurcated effect - suppressing proliferation and inducing premature erythroid differentiation - both of which are rescued by clinical-stage TGFBR1 inhibitor. Through integrative RNA-seq, ChIP-seq, and Micro-C analyses, we find TGF-β1 activates β-globin LCR, driving early differentiation, while concurrently disrupting the MYC enhancer-promoter interaction to block proliferation. We validate erythropoiesis defects in vivo by performing single-cell RNA-seq in a TGF-β1 overexpressing mouse model. Overall, we show that TGF-β1/SMAD2 signaling re-wires chromatin to regulate erythropoiesis by affecting the β-LCR and MYC super enhancer regions.