Runx1 and Cbfβ are critical for the establishment of definitive hematopoiesis and are implicated in leukemic transformation. Despite the absolute requirements for these factors in the development of hematopoietic stem cells and lymphocytes, their roles in the development of bone marrow progenitor subsets have not been defined. Here, we demonstrate that Cbfβ is essential for the development of Flt3(+) macrophage-dendritic cell (DC) progenitors in the bone marrow and all DC subsets in the periphery. Besides the loss of DC progenitors, pan-hematopoietic Cbfb-deficient mice also lack CD105(+) erythroid progenitors, leading to severe anemia at 3 to 4 months of age. Instead, Cbfb deficiency results in aberrant progenitor differentiation toward granulocyte-macrophage progenitors (GMPs), resulting in a myeloproliferative phenotype with accumulation of GMPs in the periphery and cellular infiltration of the liver. Expression of the transcription factor Irf8 is severely reduced in Cbfb-deficient progenitors, and overexpression of Irf8 restors DC differentiation. These results demonstrate that Runx proteins and Cbfβ restrict granulocyte lineage commitment to facilitate multilineage hematopoietic differentiation and thus identify their novel tumor suppressor function in myeloid leukemia.