Stem cell differentiation and lineage specification depend on coordinated programs of gene expression, but our knowledge of the chromatin-modifying factors regulating these events remains incomplete. Ubiquitination of histone H2A(H2A-K119u) is a common chromatin modification associated with gene silencing, and controlled by the ubiquitin-ligase polycomb repressor complex 1 (PRC1) and H2A-deubiquitinating enzymes (H2A-DUBs). The roles of H2A-DUBs in mammalian development, stem cells, and hematopoiesis have not been addressed. Here we characterized an H2A-DUB targeted mouse line Mysm1tm1 a/tm1a and demonstrated defects in BM hematopoiesis, resulting in lymphopenia, anemia, and thrombocytosis. Development of lymphocytes was impaired from the earliest stages of their differentiation, and there was also a depletion of erythroid cells and a defect in erythroid progenitor function. These phenotypes resulted from a cell-intrinsic requirement for Mysm1 in the BM. Importantly, Mysm1 tm1a/tm1a HSCs were functionally impaired, and this was associated with elevated levels of reactive oxygen species, γH2AX DNA damage marker, and p53 protein in the hematopoietic progenitors. Overall, these data establish a role for Mysm1 in the maintenance of BM stem cell function, in the control of oxidative stress and genetic stability in hematopoietic progenitors, and in the development of lymphoid and erythroid lineages.