Hematopoiesis is a complex process that relies on various cell types, signaling pathways, transcription factors and a specific niche. The integration of these various components is of critical importance to normal blood development, as deregulation of these may lead to bone marrow failure or malignancy. Tle4, a transcriptional corepressor, acts as a tumor suppressor gene in a subset of acute myeloid leukemia, yet little is known about its function in normal and malignant hematopoiesis or in mammalian development. We report here that Tle4 knockout mice are runted and die at around four weeks with defects in bone development and BM aplasia. By two weeks of age, Tle4 knockout mice exhibit leukocytopenia, B cell lymphopenia, and significant reductions in hematopoietic stem and progenitor cells. Tle4 deficient hematopoietic stem cells are intrinsically defective in B lymphopoiesis and exhaust upon stress, such as serial transplantation. In the absence of Tle4 there is a profound decrease in bone mineralization. In addition, Tle4 knockout stromal cells are defective at maintaining wild-type hematopoietic stem cell function in vitro. In summary, we illustrate a novel and essential role for Tle4 in the extrinsic and intrinsic regulation of hematopoiesis and in bone development.