Differentiation of HSCs creates formaldehyde, which is highly reactive and forms DNA ICLs and other DNA and protein adducts. (A) Normal hematopoiesis. The majority of the formaldehyde is detoxified by the first tier of protection including ADH5, ALDH2, and possibly other enzymes active in HSCs. The leftover DNA crosslinks are repaired by the FA-repair pathway (second tier of protection) resulting in normal hematopoiesis. (B) HSC failure or transformation. Either of the tiers may fail leading to overlapping cellular and patient phenotypes including bone marrow failure, myelodysplastic syndrome, and leukemia. DNA damage in cells deficient for both ADH5 and ALDH2 (ADH5^−/−ALDH2^*2/+) seems to overwhelm the FA DNA-repair pathway, and patients present with a syndrome akin to FA but with a negative chromosome breakage test upon treatment with DEB or MMC. In FA, the first tier of protection works, but even the low levels of reactive aldehydes, when not cleared from the DNA, cause HSC demise.