FHL2, a member of the four and one half LIM domain protein family, is a critical transcriptional modulator. Here, we identify FHL2 as a critical regulator of hematopoietic stem cells (HSCs) that is essential for maintaining HSC self-renewal under regenerative stress. We find that Fhl2 loss has limited effects on hematopoiesis under homeostatic conditions. In contrast, Fhl2-null chimeric mice reconstituted with Fhl2-null bone marrow cells developed abnormal hematopoiesis with significantly reduced numbers of HSCs, hematopoietic progenitor cells (HPCs), red blood cells and platelets as well as hemoglobin levels. In addition, HSCs displayed a significantly reduced self-renewal capacity and were skewed toward myeloid lineage differentiation. We find that Fhl2 loss reduces both HSC quiescence and survival in response to regenerative stress, probably as a consequence of Fhl2-loss-mediated downregulation of cyclin-dependent kinase-inhibitors, including p21(Cip) and p27(Kip1). Interestingly, FHL2 is regulated under the control of a tissue-specific promoter in hematopoietic cells and it is downregulated by DNA hypermethylation in the leukemia cell line and primary leukemia cells. Furthermore, we find that downregulation of FHL2 frequently occurs in myelodysplastic syndrome and acute myeloid leukemia patients, raising a possibility that FHL2 downregulation has a role in the pathogenesis of myeloid malignancies.