Directional migration determines hematopoietic stem/progenitor cell (HSPC) homing, which depends upon the interaction between the chemokine CXCL12 and its receptor CXCR4. CD26 is a widely expressed membrane-bound ectopeptidase that cleaves CXCL12 thereby depleting its chemokine activity. We identified tissue-factor pathway inhibitor (TFPI) as a biological inhibitor of CD26 in murine and human HSPCs. We observed low-level TFPI expression in endothelial cells in the bone marrow (BM), which did not increase following radiation injury. Treatment of HSPCs with TFPI in vitro led to enhanced HSPC migration toward CXCL12, as well as homing and engraftment in the BM upon transplantation. We found that Glypican-3 (GPC3), a heparan sulfate proteoglycan expressed on murine as well as human HSPCs, mediated this effect. TFPI did not affect CD26 activity, migration, or homing of GPC3(-/-) HSPCs, while it affected GPC1(-/-) HSPCs similar to wild-type HSPCs. Moreover, proliferation of GPC3(-/-) but not GPC1(-/-) BM HSPCs was significantly increased, which was associated with a decrease in the primitive HSC pool in BM and an increase in proportion of the circulating HSPCs in the peripheral blood. Hence, we present a novel role for TFPI and GPC3 in regulating HSC homing as well as retention in the BM.