The chromodomain helicase DNA-binding proteins (CHDs) are known to affect transcription through their ability to remodel chromatin and modulate histone deacetylation. In an effort to understand the functional role of the CHD2 in mammals, we have generated a Chd2 mutant mouse model. Remarkably, the Chd2 protein appears to play a critical role in the development, hematopoiesis and tumor suppression. The Chd2 heterozygous mutant mice exhibit increased extramedullary hematopoiesis and susceptibility to lymphomas. At the cellular level, Chd2 mutants are defective in hematopoietic stem cell differentiation, accumulate higher levels of the chromatin-associated DNA damage response mediator, gamma H2AX, and exhibit an aberrant DNA damage response after X-ray irradiation. Our data suggest a direct role for the chromatin remodeling protein in DNA damage signaling and genome stability maintenance.