The activity of adult stem cells is essential to replenish mature cells constantly lost due to normal tissue turnover. By a poorly understood mechanism, stem cells are maintained through self-renewal while concomitantly producing differentiated progeny. Here, we provide genetic evidence for an unexpected function of the c-Myc protein in the homeostasis of hematopoietic stem cells (HSCs). Conditional elimination of c-Myc activity in the bone marrow (BM) results in severe cytopenia and accumulation of HSCs in situ. Mutant HSCs self-renew and accumulate due to their failure to initiate normal stem cell differentiation. Impaired differentiation of c-Myc-deficient HSCs is linked to their localization in the differentiation preventative BM niche environment, and correlates with up-regulation of N-cadherin and a number of adhesion receptors, suggesting that release of HSCs from the stem cell niche requires c-Myc activity. Accordingly, enforced c-Myc expression in HSCs represses N-cadherin and integrins leading to loss of self-renewal activity at the expense of differentiation. Endogenous c-Myc is differentially expressed and induced upon differentiation of long-term HSCs. Collectively, our data indicate that c-Myc controls the balance between stem cell self-renewal and differentiation, presumably by regulating the interaction between HSCs and their niche.