The SH2 domain–containing inositol 5′-phosphatase-1 (SHIP) has the potential to modulate multiple signaling pathways downstream of receptors that impact hematopoietic stem cell (HSC) biology. Therefore, we postulated that SHIP might play an important role in HSC homeostasis and function. Consistent with this hypothesis, HSC proliferation and numbers are increased in SHIP^–/– mice. Despite expansion of the compartment, SHIP^–/– HSCs exhibit reduced capacity for long-term repopulation. Interestingly, we observe that SHIP^–/– stem/progenitor cells home inefficiently to bone marrow (BM), and consistent with this finding, have reduced surface levels of both CXCR4 and vascular cell adhesion marker-1 (VCAM-1). These studies demonstrate that SHIP is critical for normal HSC function, homeostasis, and homing.