Stem cell factor (SCF) is expressed as an integral membrane growth factor that may be differentially processed to produce predominantly soluble (S) (SCF²⁴⁸) or membrane-associated (MA) (SCF²²⁰) protein. A critical role for membrane presentation of SCF in the hematopoietic microenvironment (HM) has been suggested from the phenotype of the Steel-dickie(Sl^d) mice, which lack MA SCF, and by studies performed in our laboratory (and by others) using long-term bone marrow cultures and transgenic mice expressing different SCF isoforms.Steel^17H (Sl^17H) is an SCF mutant that demonstrates melanocyte defects and sterility in males but not in females. The Sl^17H allele contains a intronic mutation resulting in the substitution of 36 amino acids (aa’s) in the SCF cytoplasmic domain with 28 novel aa’s. This mutation, which affects virtually the entire cytoplasmic domain of SCF, could be expected to alter membrane SCF presentation. To investigate this possibility, we examined the biochemical and biologic properties of the Sl^17H-encoded protein and its impact in vivo and in vitro on hematopoiesis and on c-Kit signaling. We demonstrate that compound heterozygous Sl/Sl^17H mice manifest multiple hematopoietic abnormalities in vivo, including red blood cell deficiency, bone marrow hypoplasia, and defective thymopoiesis. In vitro, both S and MA Sl^17H isoforms of SCF exhibit reduced cell surface expression on stromal cells and diminished biological activity in comparison to wild-type (wt) SCF isoforms. These alterations in presentation and biological activity are associated with a significant reduction in the proliferation of an SCF-responsive erythroid progenitor cell line and in the activation of phosphatidylinositol 3-Kinase/Akt and mitogen-activated protein-Kinase signaling pathways. In vivo, transgene expression of the membrane-restricted (MR) (SCF^X9/D3) SCF in Sl/Sl^17H mutants results in a significant improvement in peripheral red blood cell counts in comparison toSl/Sl^17H mice.