Wingless (Wnt) is a potent morphogen demonstrated in multiple cell lineages to promote the expansion and maintenance of stem and progenitor cell populations. Wnt effects are highly context dependent, and varying effects of Wnt signaling on hematopoietic stem cells (HSCs) have been reported. We explored the impact of Wnt signaling in vivo, specifically in the context of the HSC niche by using an osteoblast-specific promoter driving expression of the paninhibitor of canonical Wnt signaling, Dickkopf1 (Dkk1). Here we report that Wnt signaling was markedly inhibited in HSCs and, unexpectedly given prior reports, reduction in HSC Wnt signaling resulted in reduced p21Cip1 expression, increased cell cycling, and a progressive decline in regenerative function after transplantation. This effect was microenvironment determined, but irreversible if the cells were transferred to a normal host. Wnt pathway activation in the niche is required to limit HSC proliferation and preserve the reconstituting function of endogenous hematopoietic stem cells.