Despite evidence of chronic inflammation in myelodysplastic syndrome (MDS) and cell-intrinsic dysregulation of Toll-like receptor (TLR) signaling in MDS hematopoietic stem and progenitor cells (HSPCs), the mechanisms responsible for the competitive advantage of MDS HSPCs in an inflammatory milieu over normal HSPCs remain poorly defined. Here, we found that chronic inflammation was a determinant for the competitive advantage of MDS HSPCs and for disease progression. The cell-intrinsic response of MDS HSPCs, which involves signaling through the noncanonical NF-κB pathway, protected these cells from chronic inflammation as compared to normal HSPCs. In response to inflammation, MDS HSPCs switched from canonical to noncanonical NF-κB signaling, a process that was dependent on TLR-TRAF6-mediated activation of A20. The competitive advantage of TLR-TRAF6-primed HSPCs could be restored by deletion of A20 or inhibition of the noncanonical NF-κB pathway. These findings uncover the mechanistic basis for the clonal dominance of MDS HSPCs and indicate that interfering with noncanonical NF-κB signaling could prevent MDS progression.