Abstract Myeloblast expansion is a hallmark of disease progression and comprises CD34+ hematopoietic stem and progenitor cells (HSPC). How this compartment evolves during disease progression in chronic myeloid neoplasms is unknown. Using single-cell RNA sequencing and high-parameter flow cytometry, we show that chronic myelomonocytic leukemia (CMML) CD34+ HSPC can be classified into three differentiation trajectories: monocytic, megakaryocyte-erythroid progenitor (MEP), and normal-like. Hallmarks of monocytic-biased trajectory were enrichment of CD120b+ inflammatory granulocyte–macrophage progenitor (GMP)-like cells, activated cytokine receptor signaling, phenotypic hematopoietic stem cell (HSC) depletion, and adverse outcomes. Cytokine receptor diversity was generally an adverse feature and elevated in CD120b+ GMPs. Hypomethylating agents decreased monocytic-biased cells in CMML patients. Given the enrichment of RAS pathway mutations in monocytic-biased cells, NRAS-competitive transplants and LPS-treated xenograft models recapitulated monocytic-biased CMML, suggesting that hematopoietic stress precipitates the monocytic-biased state. Deconvolution of HSPC compartments in other myeloid neoplasms and identifying therapeutic strategies to mitigate the monocytic-biased differentiation trajectory should be explored. Significance: Our findings establish that multiple differentiation states underlie CMML disease progression. These states are negatively augmented by inflammation and positively affected by hypomethylating agents. Furthermore, we identify HSC depletion and expansion of GMP-like cells with increased cytokine receptor diversity as a feature of myeloblast expansion in inflammatory chronic myeloid neoplasms. This article is highlighted in the In This Issue feature, p. 476