RNA has been classically known to play central roles in biology, including maintaining telomeres, protein synthesis, and in sex chromosome compensation. While thousands of long noncoding RNAs (lncRNAs) have been identified, attributing RNA-based roles to lncRNA loci requires assessing whether phenotype(s) could be due to DNA regulatory elements, transcription, or the lncRNA. Here, we use the conserved X chromosome lncRNA locus Firre, as a model to discriminate between DNA- and RNA-mediated effects in vivo. We demonstrate that (i) Firre mutant mice have cell-specific hematopoietic phenotypes, and (ii) upon exposure to lipopolysaccharide, mice overexpressing Firre exhibit increased levels of pro-inflammatory cytokines and impaired survival. (iii) Deletion of Firre does not result in changes in local gene expression, but rather in changes on autosomes that can be rescued by expression of transgenic Firre RNA. Together, our results provide genetic evidence that the Firre locus produces a trans-acting lncRNA that has physiological roles in hematopoiesis.