We used a retroviral integration screen to search for novel genes that regulate HSC function. One of the genes that conferred HSC dominance when overexpressed due to an adjacent retroviral insertion was Musashi 2 (Msi2), an RNA-binding protein that can act as a translational inhibitor. A gene-trap mouse model that inactivates the gene shows that Msi2 is more highly expressed in long-term (LT) and short-term (ST) HSCs, as well as in lymphoid myeloid primed progenitors (LMPPs), but much less in intermediate progenitors and mature cells. Mice lacking Msi2 are fully viable for up to a year or more, but exhibit severe defects in primitive precursors, most significantly a reduction in the number of ST-HSCs and LMPPs and a decrease in leukocyte numbers, effects that are exacerbated with age. Cell-cycle and gene-expression analyses suggest that the main hematopoietic defect in Msi2-defective mice is the decreased proliferation capacity of ST-HSCs and LMPPs. In addition, HSCs lacking Msi2 are severely impaired in competitive repopulation experiments, being overgrown by wild-type cells even when mutant cells were provided in excess. Our data indicate that Msi2 maintains the stem cell compartment mainly by regulating the proliferation of primitive progenitors downstream of LT-HSCs.