Haematopoietic stem cells (HSCs) regenerate blood cells throughout the lifespan of an organism. With age, the functional quality of HSCs declines, partly owing to the accumulation of damaged DNA. However, the factors that damage DNA and the protective mechanisms that operate in these cells are poorly understood. We have recently shown that the Fanconi anaemia DNA-repair pathway counteracts the genotoxic effects of reactive aldehydes. Mice with combined inactivation of aldehyde catabolism (through Aldh2 knockout) and the Fanconi anaemia DNA-repair pathway (Fancd2 knockout) display developmental defects, a predisposition to leukaemia, and are susceptible to the toxic effects of ethanol-an exogenous source of acetaldehyde. Here we report that aged Aldh2(-/-) Fancd2(-/-) mutant mice that do not develop leukaemia spontaneously develop aplastic anaemia, with the concomitant accumulation of damaged DNA within the haematopoietic stem and progenitor cell (HSPC) pool. Unexpectedly, we find that only HSPCs, and not more mature blood precursors, require Aldh2 for protection against acetaldehyde toxicity. Additionally, the aldehyde-oxidizing activity of HSPCs, as measured by Aldefluor stain, is due to Aldh2 and correlates with this protection. Finally, there is more than a 600-fold reduction in the HSC pool of mice deficient in both Fanconi anaemia pathway-mediated DNA repair and acetaldehyde detoxification. Therefore, the emergence of bone marrow failure in Fanconi anaemia is probably due to aldehyde-mediated genotoxicity restricted to the HSPC pool. These findings identify a new link between endogenous reactive metabolites and DNA damage in HSCs, and define the protective mechanisms that counteract this threat.