Abstract The proinflammatory cytokine interferon-γ (IFN-γ) has been implicated in human hematopoietic stem and progenitor cell (HSPC) depletion in immune-mediated bone marrow failure syndromes. We show that IFN-γ specifically prevents full engagement of thrombopoietin (TPO), a primary positive regulator of HSPC survival, to its receptor (c-MPL) via steric occlusion of the low-affinity binding site, contributing to perturbation of TPO-induced signaling pathways and decreased survival of human HSPCs. Eltrombopag, a synthetic small molecule mimetic of TPO that interacts with c-MPL at a position distinct from the extracellular binding site of TPO, bypasses this inhibition, providing an explanation for its clinical activity in bone marrow failure, despite already elevated endogenous TPO levels. Thus, IFN-γ–mediated perturbation of TPO:c-MPL complex formation and the resulting inhibition of a critical pathway of growth factor cell signaling may represent a general mechanism by which IFN-γ impairs the function of human HSPCs. This understanding could have broad therapeutic implications for various disorders of chronic inflammation.