Apart from the central role of the activated JAK/STAT signaling pathway, ASXL1 mutations are the most recurrent additional mutations in myeloproliferative neoplasms and occur much more commonly in myelofibrosis than in essential thrombocythemia and polycythemia vera. However, the mechanism of the association with ASXL1 mutations and bone marrow fibrosis remains unknown. Here, integrating our own data from patients with myeloproliferative neoplasms and a hematopoietic-specific Asxl1 deletion/Jak2V617F mouse model, we show that ASXL1 mutations are associated with advanced myeloproliferative neoplasm phenotypes and onset of myelofibrosis. ASXL1 mutations induce skewed monocyte/macrophage and neoplastic monocyte-derived fibrocyte differentiation, consequently they enhance inflammation and bone marrow fibrosis. Consistently, the loss of ASXL1 and JAK2V617F mutations in hematopoietic stem and progenitor cells leads to enhanced activation of polycomb group target genes, such as EGR1. The upregulation of EGR1, in turn, accounts for increased hematopoietic stem and progenitor cell commitment to the monocyte/macrophage lineage. Moreover, EGR1 induces the activation of TNFA and thereby further drives the differentiation of monocytes to fibrocytes. Accordingly, combined treatment with a TNFR antagonist and ruxolitinib significantly reduces fibrocyte production in vitro. Altogether, these findings demonstrate that ASXL1 mutations accelerate fibrocyte production and inflammation in myeloproliferative neoplasms via the EGR1-TNFA axis, explaining the cellular and molecular basis for bone marrow fibrosis and the proof-ofconcept for anti-fibrosis treatment.