Stem cell population size is highly regulated across species and tissue types, and alterations are associated with premature tissue failure or cancer. We assessed whether the tumor suppressor and mediator of cell contact inhibition Nf2/merlin plays a role in governing the hematopoietic stem cell pool by stem cell-autonomous or niche-determined processes. Hematopoietic stem cells in Nf2-deficient mice were increased in number and demonstrated a marked shift in location to the circulation. These changes were entirely dependent on changes in the microenvironment, with a marked increase in trabecular bone and marrow vascularity associated with increased VEGF, but without cell-autonomous alterations in stem cell characteristics. Nf2/merlin is critical for maintaining normal structure and function of the hematopoietic stem cell niche. It limits both bone and vascular components, and our model suggests that it thereby constrains stem cell number and position.