Chronic infections affect a third of the world's population and can cause bone marrow suppression, a severe condition that increases mortality from infection. To uncover the basis for infection-associated bone marrow suppression, we conducted repeated infection of WT mice with Mycobacterium avium. After 4–6 months, mice became pancytopenic. Their hematopoietic stem and progenitor cells (HSPCs) were severely depleted and displayed interferon gamma (IFN-γ) signaling-dependent defects in self-renewal. There was no evidence of increased HSPC mobilization or apoptosis. However, consistent with known effects of IFN-γ, transcriptome analysis pointed toward increased myeloid differentiation of HSPCs and revealed the transcription factor Batf2 as a potential mediator of IFN-γ-induced HSPC differentiation. Gain- and loss-of-function studies uncovered a role for Batf2 in myeloid differentiation in both murine and human systems. We thus demonstrate that chronic infection can deplete HSPCs and identify BATF2 as a mediator of infection-induced HSPC terminal differentiation.