The 'ataxia telangiectasia mutated' (Atm) gene maintains genomic stability by activating a key cell-cycle checkpoint in response to DNA damage, telomeric instability or oxidative stress. Mutational inactivation of the gene causes an autosomal recessive disorder, ataxia-telangiectasia, characterized by immunodeficiency, progressive cerebellar ataxia, oculocutaneous telangiectasia, defective spermatogenesis, premature ageing and a high incidence of lymphoma. Here we show that ATM has an essential function in the reconstitutive capacity of haematopoietic stem cells (HSCs) but is not as important for the proliferation or differentiation of progenitors, in a telomere-independent manner. Atm-/- mice older than 24 weeks showed progressive bone marrow failure resulting from a defect in HSC function that was associated with elevated reactive oxygen species. Treatment with anti-oxidative agents restored the reconstitutive capacity of Atm-/- HSCs, resulting in the prevention of bone marrow failure. Activation of the p16(INK4a)-retinoblastoma (Rb) gene product pathway in response to elevated reactive oxygen species led to the failure of Atm-/- HSCs. These results show that the self-renewal capacity of HSCs depends on ATM-mediated inhibition of oxidative stress.