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Introduction Stem cell fitness dictates essential biological processes like tissue homeostasis and ageing. The overall contribution of DNA damage tolerance (DDT) in maintaining stem cell fitness remains unknown. DDT pathways which enable replication in the presence of DNA replication impediments are facilitated by PCNA K164 ubiquitination and REV1. By intercrossing Pcna K164R mutant and Rev1 deficient mice, DDT was found to be essential for mammalian life. Material and methods We crossed mouse models with Rev1 deletion and Pcna K164R mutation. We use flow cytometry, pathology, and single cell RNA sequencing in these mouse models to determine the relevance of DDT in mice. Results and discussions By intercrossing Pcna K164R mutant and Rev1 deficient mice, DDT was found to be essential for mammalian life. A compound mutation of Rev1 and Pcna K164R rendered hematopoietic stem cells (HSCs) and their immediate precursors genetically instable, instigating a pathological process where the associated HSC depletion culminated in a severe embryonic lethal anaemia. Single cell RNA-sequencing of the remaining LSK cells revealed a remarkable stress-induced plasticity of multipotent progenitors, and the existence of a novel CD24a high ,CD93 low erythroid-committed progenitor (ECP) compartment. Conclusion DDT is a key activity within the DNA damage response network, where PCNA K164 and REV1 primarily serve non-epistatic DDT pathways and are essential in maintaining HSCs. Furthermore, we reveal a novel CD24a high ,CD93 low erythroid-committed progenitor (ECP) within the LSK compartment.