The consequences of immune dysfunction in B-chronic lymphocytic leukemia (CLL) likely relate to the incidence of serious recurrent infections and second malignancies that plague CLL patients. The well-described immune abnormalities are not able to consistently explain these complications. Here, we report bone marrow (BM) hematopoietic dysfunction in early and late stage untreated CLL patients. Numbers of CD34+ BM hematopoietic progenitors responsive in standard colony-forming unit (CFU) assays, including CFU-GM/GEMM and CFU-E, were significantly reduced. Flow cytometry revealed corresponding reductions in frequencies of all hematopoietic stem and progenitor cell (HSPC) subsets assessed in CLL patient marrow. Consistent with the reduction in HSPCs, BM resident monocytes and natural killer cells were reduced, a deficiency recapitulated in blood. Finally, we report increases in protein levels of the transcriptional regulators HIF-1α, GATA-1, PU.1, and GATA-2 in CLL patient BM, providing molecular insight into the basis of HSPC dysfunction. Importantly, PU.1 and GATA-2 were rapidly increased when healthy HSPCs were exposed in vitro to TNFα, a cytokine constitutively produced by CLL B cells. Together, these findings reveal BM hematopoietic dysfunction in untreated CLL patients that provides new insight into the etiology of the complex immunodeficiency state in CLL.