SH2-containing inositol 5-phosphatase (SHIP) is an important negative regulator of cytokine and immune receptor signaling. SHIP-deficient mice have a number of hematopoietic perturbations, including enhanced cytokine responsiveness. Because cytokines play an important role in the maintenance/expansion of the primitive hematopoietic cell pool, we investigated the possibility that SHIP also regulates the properties of cells in these compartments. Primitive hematopoietic cells were evaluated in SHIP-deficient mice and wild-type littermate controls using the colony-forming unit-spleen (CFU-S) and competitive repopulating unit (CRU) assays for multipotent progenitors and long-term lympho-myeloid repopulating cells, respectively. Absence of SHIP was found to affect homeostasis of CFU-S and CRU compartments. Numbers of primitive cells were increased in extramedullary sites such as the spleen of SHIP-deficient mice, although total body numbers were not significantly changed. In vivo cell cycle status of the CRU compartment was further evaluated using 5-fluorouracil (5-FU). SHIP-deficient CRUs were more sensitive to 5-FU killing, indicating a higher proliferative cell fraction. More strikingly, SHIP was found to regulate the ability of primitive cells to regenerate in vivo, as CRU recovery was approximately 30-fold lower in mice that received transplants of SHIP-deficient cells compared with controls. These results support a major role for SHIP in modulating pathways important in homeostasis and regeneration of hematopoietic stem cells, and emphasize the importance of negative cytokine regulation at the earliest stages of hematopoiesis. (Blood. 2003;102:3541-3547)