The proinflammatory cytokine tumor necrosis factor α (TNFα) inhibits hematopoietic stem cell (HSC) expansion, interferes with HSC self-renewal and compromises the ability of HSC to reconstitute hematopoiesis. We have investigated mechanisms by which TNFα suppresses hematopoiesis using the genomic instability syndrome Fanconi anemia mouse model deficient for the complementation-group-C gene (Fancc). Examination of senescence makers, such as senescence-associated β-galactosidase, HP1-γ, p53 and p16^INK4A shows that TNFα induces premature senescence in bone marrow HSCs and progenitor cells as well as other tissues of Fancc^–/– mice. TNFα-induced senescence correlates with the accumulation of reactive oxygen species (ROS) and oxidative DNA damage. Neutralization of TNFα or deletion of the TNF receptor in Fancc^–/– mice (Fancc^–/–;Tnfr1^–/–) prevents excessive ROS production and hematopoietic senescence. Pretreatment of TNFα-injected Fancc^–/– mice with a ROS scavenger significantly reduces oxidative base damage, DNA strand breaks and senescence. Furthermore, HSCs and progenitor cells from TNFα-treated Fancc^–/– mice show increased chromosomal aberrations and have an impaired oxidative DNA-damage repair. These results indicate an intimate link between inflammatory reactive oxygen species and DNA-damage-induced premature senescence in HSCs and progenitor cells, which may play an important role in aging and anemia.