The hematopoietically expressed homeobox gene, Hhex, is a transcription factor that is important for development of definitive hematopoietic stem cells (HSCs) and B cells, and that causes T-cell leukemia when overexpressed. Here, we have used an Hhex inducible knockout mousemodel to study the role of Hhex in adult hematopoiesis. We found that loss of Hhex was tolerated in HSCs and myeloid lineages, but resulted in a progressive loss of B lymphocytes in the circulation. This was accompanied by a complete loss of B-cell progenitors in the bone marrow and of transitional B-cell subsets in the spleen. In addition, transplantation and in vitro culture experiments demonstrated an almost complete failure of Hhex-null HSCs to contribute to lymphoid lineages beyond the common lymphoid precursor stage, including T cells, B cells, NK cells, and dendritic cells. Gene expression analysis of Hhex-deleted progenitors demonstrated deregulated expression of a number of cell cycle regulators. Overexpression of one of these, cyclin D1, could rescue the B-cell developmental potential of Hhex-null lymphoid precursors. Thus, Hhex is a key regulator of early lymphoid development, functioning, at least in part, via regulation of the cell cycle.