Balancing the processes of hematopoietic stem cell (HSC) differentiation and self-renewal is critical for maintaining a lifelong supply of blood cells. The bone marrow (BM) produces a stable output of newly generated cells, but immunologic stress conditions inducing leukopenia increase the demand for peripheral blood cell supply. Here we demonstrate that the proinflammatory cytokine interferon-gamma (IFN-gamma) impairs maintenance of HSCs by directly reducing their proliferative capacity and that IFN-? impairs restoration of HSC numbers upon viral infection. We show that IFN-? reduces thrombopoietin (TPO)-mediated phosphorylation of signal transducer and activator of transcription (STAT) 5, an important positive regulator of HSC self-renewal. IFN-? also induced expression of suppressor of cytokine signaling (SOCS) 1 in HSCs, and we demonstrate that SOCS1 expression is sufficient to inhibit TPO-induced STAT5 phosphorylation. Furthermore, IFN-? deregulates expression of STAT5-mediated cell-cycle genes cyclin D1 and p57. These findings suggest that IFN-? is a negative modulator of HSC self-renewal by modifying cytokine responses and expression of genes involved in HSC proliferation. We postulate that the occurrence of BM failure in chronic inflammatory conditions, such as aplastic anemia, HIV, and graft-versus-host disease, is related to a sustained impairment of HSC self-renewal caused by chronic IFN-? signaling in these disorders.