FLIP is a well-established suppressor of death receptor-mediated apoptosis. To define its essential in vivo role in myeloid cells, we generated and characterized mice with Flip conditionally deleted in the myeloid lineage. Myeloid specific Flip-deficient mice exhibited growth retardation, premature death, and splenomegaly with altered architecture and extramedullary hematopoiesis. They also displayed a dramatic increase of circulating neutrophils and multiorgan neutrophil infiltration. In contrast, although circulating inflammatory monocytes were also significantly increased, macrophages in the spleen, lymph nodes, and the peritoneal cavity were reduced. In ex vivo cultures, bone marrow progenitor cells failed to differentiate into macrophages when Flip was deleted. Mixed bone marrow chimera experiments using cells from Flip-deficient and wild-type mice did not demonstrate an inflammatory phenotype. These observations demonstrate that FLIP is necessary for macrophage differentiation and the homeostatic regulation of granulopoiesis.