Shwachman-Diamond syndrome (SDS) is a rare multisystem disorder characterized by exocrine pancreatic insufficiency, multilineage hematopoietic dysfunction, and metaphyseal chondrodysplasia. Bone marrow dysfunction is present in nearly all patients with SDS, with neutropenia being the most common abnormality. The majority of patients with SDS have mutations in the Shwachman Bodian Diamond syndrome (SBDS) gene. We have developed a strategy to examine the consequences of lentiviral-mediated RNA interference (RNAi) of Sbds on hematopoiesis. Here, we report that both Sbds RNA and protein expression can be efficiently inhibited in primary murine hematopoietic cells using lentiviral-mediated RNAi. Inhibition of Sbds results in a defect in granulocytic differentiation in vitro and impairs myeloid progenitor generation in vivo. In addition, short-term hematopoietic engraftment was impaired, which is due in part to reduced homing of hematopoietic progenitors to the bone marrow. Finally, we show that inhibition of Sbds is associated with a decrease in circulating B lymphocytes, despite evidence of normal B lymphopoiesis. These data provide the first evidence that loss of Sbds is sufficient to induce abnormalities in hematopoiesis.