A gradual restriction in lineage potential of multipotent stem/progenitor cells is a hallmark of adult hematopoiesis, but the underlying molecular events governing these processes remain incompletely understood. Here, we identified robust expression of the leukemia-associated transcription factor hepatic leukemia factor (Hlf) in normal multipotent hematopoietic progenitors, which was rapidly downregulated upon differentiation. Interference with its normal downregulation revealed Hlf as a strong negative regulator of lymphoid development, while remaining compatible with myeloid fates. Reciprocally, we observed rapid lymphoid commitment upon reduced Hlf activity. The arising phenotypes resulted from Hlf binding to active enhancers of myeloid-competent cells, transcriptional induction of myeloid, and ablation of lymphoid gene programs, with Hlf induction of nuclear factor I C (Nfic) as a functionally relevant target gene. Thereby, our studies establish Hlf as a key regulator of the earliest lineage-commitment events at the transition from multipotency to lineage-restricted progeny, with implications for both normal and malignant hematopoiesis. Regulators of early blood cell formation are important in both health and disease. Wahlestedt et al. identify abrupt downregulation of the transcription factor Hlf during hematopoietic differentiation. Failure to downregulate Hlf leads to a drastically skewed output of mature blood cells, positioning Hlf as a critical regulator of hematopoiesis.