The rules of engagement between zinc finger transcription factors and DNA have been partly defined by in vitro DNA-binding and structural studies, but less is known about how these rules apply in vivo. Here, we demonstrate how a missense mutation in the second zinc finger of Krüppel-like factor-1 (KLF1) leads to degenerate DNA-binding specificity in vivo, resulting in ectopic transcription and anemia in the Nanmouse model. We employed ChIP-seq and 4sU-RNA-seq to identify aberrant DNA-binding events genome wide and ectopic transcriptional consequences of this binding. We confirmed novel sequence specificity of the mutant recombinant zinc finger domain by performing biophysical measurements ofinvitroDNA-binding affinity. Together, these results shed new light on the mechanisms by which missense mutations in DNA-binding domains of transcription factors can lead to autosomal dominant diseases.