Recent genomic studies have revealed that a large proportion of genes that are mutated in acute myeloid leukaemia (AML) encode epigenetic regulators. The X-linked BCL6 Corepressor (BCOR) gene encodes a protein that is a component of the variant Polycomb repressive complex (PRC) 1 and is essential for normal development. Recurrent mutations in BCOR have been identified in acute myeloid leukaemia (AML), myelodysplastic syndrome (MDS) and a range of other cancers; however, its function remains poorly understood. To comprehensively analyse the role of BCOR in haematopoiesis in vivo we generated a novel conditional knockout mouse model that mimics the truncating mutations observed in haematological malignancies. Inactivation of Bcor specifically in haematopoietic stem cells resulted in increased proliferation of myeloid progenitors at steady state that was exacerbated in a competitive transplant setting. Furthermore, Bcor loss co-operated with oncogenic KrasG12D in the initiation of an aggressive and fully transplantable acute leukaemia, demonstrating that Bcor is a powerful tumour suppressor in the myeloid lineage. To explore the molecular mechanism underlying these phenotypes we performed RNA sequencing on isolated myeloid progenitors. We found that Bcor loss drives an aberrant stem cell-like transcriptional program characterised by increased expression of Hoxa family members and decreased expression of key myeloid differentiation-associated genes Gata1 and Ear6. ChIP-seq and ATAC-seq experiments revealed that Bcor controls a key subset of PRC1-target genes that are down-regulated during normal myeloid differentiation by the deposition of repressive histone marks H2AK119ub and H3K27me3. Our work provides an in depth mechanistic understanding of how BCOR regulates cell fate decisions and contributes to the development of cancer.