Fanconi anemia (FA) is an autosomal recessive disorder characterized by progressive bone marrow failure (BMF) during childhood, aside from numerous congenital abnormalities. FA mouse models have been generated; however, they do not fully mimic the hematopoietic phenotype. As there is mounting evidence that the hematopoietic impairment starts already in utero, a human pluripotent stem cell model would constitute a more appropriate system to investigate the mechanisms underlying BMF in FA and its developmental basis. Using zinc finger nuclease (ZFN) technology, we have created a knockout of FANCA in human embryonic stem cells (hESC). We introduced a selection cassette into exon 2 thereby disrupting the FANCA coding sequence and found that whereas mono-allelically targeted cells retain an unaltered proliferation potential, disruption of the second allele causes a severe growth disadvantage. As a result, heterogeneous cultures arise due to the presence of cells still carrying an unaffected FANCA allele, quickly outgrowing the knockout cells. When pure cultures of FANCA knockout hESC are pursued either through selection or single cell cloning, this rapidly results in growth arrest and such cultures cannot be maintained. These data highlight the importance of a functional FA pathway at the pluripotent stem cell stage.