The transcription factor lymphoid enhancer-binding factor 1 (LEF-1), which plays a definitive role in granulocyte colony-stimulating factor (G-CSF) receptor-triggered granulopoiesis, is downregulated in granulocytic progenitors of severe congenital neutropenia (CN) patients. However, the exact mechanism of LEF-1 downregulation is unclear. CN patients are responsive to therapeutically high doses of G-CSF and are at increased risk of developing acute myeloid leukemia. The normal expression of LEF-1 in monocytes and lymphocytes, whose differentiation is unaffected in CN, suggests the presence of a granulopoiesis-specific mechanism downstream of G-CSF receptor signaling that leads to LEF-1 downregulation. Signal transducer and activator of transcription 5 (STAT5) is activated by G-CSF and is hyperactivated in acute myeloid leukemia. Here, we investigated the effects of activated STAT5 on LEF-1 expression and functions in hematopoietic progenitor cells. We demonstrated that constitutively active STAT5a (caSTAT5a) inhibited LEF-1-dependent autoregulation of the LEF-1 gene promoter by binding to the LEF-1 protein, recruiting Nemo-like kinase and the E3 ubiquitin-ligase NARF to LEF-1, leading to LEF-1 ubiquitination and a reduction in LEF-1 protein levels. The proteasome inhibitor bortezomib reversed the defective G-CSF-triggered granulocytic differentiation of CD34(+) cells from CN patients in vitro, an effect that was accompanied by restoration of LEF-1 protein levels and LEF-1 messenger RNA autoregulation. Taken together, our data define a novel mechanism of LEF-1 downregulation in CN patients via enhanced ubiquitination and degradation of LEF-1 protein by hyperactivated STAT5.