Mouse mutants with an impaired DNA damage response frequently exhibit a set of remarkably similar defects in the HSPC compartment that are of largely unknown molecular basis. Using Mixed-Lineage-Leukemia-5 (Mll5)-deficient mice as prototypical examples, we have identified a mechanistic pathway linking DNA damage and HSPC malfunction. We show that Mll5 deficiency results in accumulation of DNA damage and reactive oxygen species (ROS) in HSPCs. Reduction of ROS efficiently reverses hematopoietic defects, establishing ROS as a major cause of impaired HSPC function. The Ink4a/Arf locus also contributes to HSPC phenotypes, at least in part via promotion of ROS. Strikingly, toxic ROS levels in Mll5^−/− mice are critically dependent on type 1 interferon (IFN-1) signaling, which triggers mitochondrial accumulation of full-length Bid. Genetic inactivation of Bid diminishes ROS levels and reverses HSPC defects in Mll5^−/− mice. Overall, therefore, our findings highlight an unexpected IFN-1 > Bid > ROS pathway underlying DNA damage-associated HSPC malfunction.