The 7.2 kilobase (kb) Corfu deltabeta thalassemia mutation is the smallest known deletion encompassing a region upstream of the human delta gene that has been suggested to account for the vastly different phenotypes in hereditary persistence of fetal hemoglobin (HPFH) versus beta thalassemia. Fetal hemoglobin (HbF) expression in Corfu heterozygotes and homozygotes is paradoxically dissimilar, suggesting conflicting theories as to the function of the region on globin gene regulation. Here, we measure gamma- and beta-globin gene transcription, steady-state mRNA, and hemoglobin expression levels in primary erythroid cells cultured from several patients with Corfu deltabeta thalassemia. We show through RNA fluorescence in situ hybridization that the Corfu deletion results in high-level transcription of the fetal gamma genes in cis with a concomitant reduction in transcription of the downstream beta gene. Surprisingly, we find that elevated gamma gene transcription does not always result in a corresponding accumulation of gamma mRNA or fetal hemoglobin, indicating a post-transcriptional regulation of gamma gene expression. The data suggest that efficient gamma mRNA accumulation and HbF expression are blocked until beta mRNA levels fall below a critical threshold. These results explain the Corfu paradox and show that the deleted region harbors a critical element that functions in the developmentally regulated transcription of the beta-globin genes.