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C9ORF72 mutations are found in a significant fraction of patients suffering from amyotrophic lateral sclerosis and frontotemporal dementia, yet the function of the C9ORF72 gene product remains poorly understood. We show that mice harboring loss-of-function mutations in the ortholog of C9ORF72 develop splenomegaly, neutrophilia, thrombocytopenia, increased expression of inflammatory cytokines, and severe autoimmunity, ultimately leading to a high mortality rate. Transplantation of mutant mouse bone marrow into wild-type recipients was sufficient to recapitulate the phenotypes observed in the mutant animals, including autoimmunity and premature mortality. Reciprocally, transplantation of wild-type mouse bone marrow into mutant mice improved their phenotype. We conclude that C9ORF72 serves an important function within the hematopoietic system to restrict inflammation and the development of autoimmunity.