AbstractCellular competition for limiting hematopoietic factors is a physiologically regulated but poorly understood process. Here, we studied this phenomenon by hampering hematopoietic progenitor access to Leptin receptor⁺ mesenchymal stem/progenitor cells (MSPCs) and endothelial cells (ECs). We show that HSC numbers increase by 2-fold when multipotent and lineage-restricted progenitors fail to respond to CXCL12 produced by MSPCs and ECs. HSCs are qualitatively normal, and HSC expansion only occurs when early hematopoietic progenitors but not differentiated hematopoietic cells lack CXCR4. Furthermore, the MSPC and EC transcriptomic heterogeneity is stable, suggesting that it is impervious to major changes in hematopoietic progenitor interactions. Instead, HSC expansion correlates with increased availability of membrane-bound stem cell factor (mSCF) on MSPCs and ECs presumably due to reduced consumption by cKit-expressing hematopoietic progenitors. These studies suggest that an intricate homeostatic balance between HSCs and proximal hematopoietic progenitors is regulated by cell competition for limited amounts of mSCF.