Post-translational modifications of core histones participate in controlling the expression of genes. Methylation of lysine 4 of histone H3 (H3K4), together with acetylation of H3K27, is closely associated with open chromatin and gene transcription. H3K4 methylation is catalyzed by KMT2 lysine methyltransferases that include the mixed-lineage leukemia 1-4 (MLL1-4) and SET1A and B enzymes. For efficient catalysis, all six require a core complex of four proteins, WDR5, RBBP5, ASH2L, and DPY30. We report that targeted disruption of Ash2l in the murine hematopoietic system results in the death of the mice due to a rapid loss of mature hematopoietic cells. However, lin-Sca1+Kit+ (LSK) cells, which are highly enriched in hematopoietic stem and multi-potent progenitor cells, accumulated in the bone marrow. The loss of Ash2l resulted in global reduction of H3K4 methylation and deregulated gene expression, including down-regulation of many mitosis-associated genes. As a consequence, LSK cells accumulated in the G2-phase of the cell cycle and were unable to proliferate and differentiate. In conclusion, Ash2l is essential for balanced gene expression and for hematopoietic stem and multi-potent progenitor cell physiology.