Myeloproliferative disorders (MPDs) are characterized by cytokine hypersensitivity and apoptosis resistance. Development of a block in myeloid differentiation is associated with progression of MPD to acute myeloid leukemia (AML) and portends poor prognosis. Identifying molecular markers of this transition may suggest targets for therapeutic intervention. Interferon consensus sequence binding protein (ICSBP, also known as IRF8) is an interferon-regulatory transcription factor that functions as a leukemia tumor suppressor. In mice, ICSBP deficiency induces an MPD that progresses to AML over time, suggesting that ICSBP deficiency is sufficient for myeloproliferation, but additional genetic lesions are necessary for AML. Since activity of ICSBP is influenced by tyrosine phosphorylation state, we hypothesized that mutations in molecular pathways that regulate this process might synergize with ICSBP deficiency for progression to AML. Consistent with this, we found that constitutive activation of SHP2 protein tyrosine phosphatase synergized with ICSBP haploinsufficiency to facilitate cytokine-induced myeloproliferation, apoptosis resistance, and rapid progression to AML in a murine bone marrow transplantation model. Constitutive SHP2 activation cooperated with ICSBP deficiency to increase the number of progenitors in the bone marrow and myeloid blasts in circulation, indicating a block in differentiation. Since SHP2 activation and ICSBP deficiency may coexist in human myeloid malignancies, our studies have identified a molecular mechanism potentially involved in disease progression in such diseases.