While a number of DNA binding transcription factors have been identified that control hematopoietic cell fate decisions, only a limited number of transcriptional corepressors (e.g., the retinoblastoma protein [pRB] and the nuclear hormone corepressor [N-CoR]) have been linked to these functions. Here, we show that the transcriptional corepressor Mtg16 (myeloid translocation gene on chromosome 16), which is targeted by t(16;21) in acute myeloid leukemia, is required for hematopoietic progenitor cell fate decisions and for early progenitor cell proliferation. Inactivation of Mtg16 skewed early myeloid progenitor cells toward the granulocytic/macrophage lineage while reducing the numbers of megakaryocyte-erythroid progenitor cells. In addition, inactivation of Mtg16 impaired the rapid expansion of short-term stem cells, multipotent progenitor cells, and megakaryocyte-erythroid progenitor cells that is required under hematopoietic stress/emergency. This impairment appears to be a failure to proliferate rather than an induction of cell death, as expression of c-Myc, but not Bcl2, complemented the Mtg16(-/-) defect.