Interferon-α (IFNα) is an effective treatment of patients with myeloproliferative neoplasms (MPNs). In addition to inducing hematological responses in most MPN patients, IFNα reduces the JAK2V617F allelic burden and can render the JAK2V617F mutant clone undetectable in some patients. The precise mechanism underlying these responses is incompletely understood and whether the molecular responses that are seen occur due to the effects of IFNα on JAK2V617F mutant stem cells is debated. Using a murine model of Jak2V617F MPN, we investigated the effects of IFNα on Jak2V617F MPN-propagating stem cells in vivo. We report that IFNα treatment induces hematological responses in the model and causes depletion of Jak2V617F MPN-propagating cells over time, impairing disease transplantation. We demonstrate that IFNα treatment induces cell cycle activation of Jak2V617F mutant long-term hematopoietic stem cells and promotes a predetermined erythroid-lineage differentiation program. These findings provide insights into the differential effects of IFNα on Jak2V617F mutant and normal hematopoiesis and suggest that IFNα achieves molecular remissions in MPN patients through its effects on MPN stem cells. Furthermore, these results support combinatorial therapeutic approaches in MPN by concurrently depleting dormant JAK2V617F MPN-propagating stem cells with IFNα and targeting the proliferating downstream progeny with JAK2 inhibitors or cytotoxic chemotherapy.