Wnt signaling increases hematopoietic stem cell self-renewal and is activated in both myeloid and lymphoid malignancies, indicating involvement in both normal and malignant hematopoiesis. We report here activated canonical Wnt signaling in the hematopoietic system through conditional expression of a stable form of beta-catenin. This enforced expression led to hematopoietic failure associated with loss of myeloid lineage commitment at the granulocyte-macrophage progenitor stage; blocked erythrocyte differentiation; disruption of lymphoid development; and loss of repopulating stem cell activity. Loss of hematopoietic stem cell function was associated with decreased expression of Cdkn1a (encoding the cell cycle inhibitor p21(cdk)), Sfpi1, Hoxb4 and Bmi1 (encoding the transcription factors PU.1, HoxB4 and Bmi-1, respectively) and altered integrin expression in Lin(-)Sca-1(+)c-Kit(+) cells, whereas PU.1 was upregulated in erythroid progenitors. Constitutive activation of canonical Wnt signaling therefore causes multilineage differentiation block and compromised hematopoietic stem cell maintenance.