Fanconi anemia (FA) is the most common bone marrow failure (BMF) syndrome. Beyond a role in DNA repair, FA genes have a role in suppressing DNA-RNA hybrids, termed R-loops, which can be generated via RNA polymerase (RNAP)-mediated transcription. However, how these processes, including a role in fate determination of hematopoietic stem cells (HSCs), are related to BMF is largely unknown. Additionally, single FA gene knockouts in mice do not recapitulate most phenotypes observed in FA patients. Thus, we generated a mouse model for FA by introducing heterozygous Setd2, which restricts RNAP-dependent transcription. Here, we show that FA patient-derived cells and Setd2+/- Fanca-/- HSCs share increased R-loop as well as dsRNA levels, and a ribosomal biogenesis defect. Further, Setd2+/- Fanca-/- HSCs display cell cycle arrest, mitotic errors and BMF phenotypes. Importantly, utilizing our Setd2+/- Fanca-/- mice, we discovered that Juglone, a pan RNAP inhibitor, reduces R-loop and dsRNA and reverses ribosomal biogenesis defects and mitotic errors, thereby rescuing BMF. In conclusion, this study establishes a novel mouse model that underscores a key role for R-loop formation, ribosomal biogenesis defects and mitotic errors in HSCs in driving BMF in Fanconi anemia. We also introduce a potential therapeutic avenue based upon pan-inhibition of RNA polymerases utilizing Juglone.