The BCL6 Corepressor (BCOR) is a component of a variant Polycomb repressive complex 1 (PRC1) that is essential for normal development. Recurrent mutations in the BCOR gene have been identified in acute myeloid leukaemia and myelodysplastic syndrome among other cancers; however, its function remains poorly understood. Here we examine the role of BCOR in haematopoiesis in vivo using a conditional mouse model that mimics the mutations observed in haematological malignancies. Inactivation of Bcor in haematopoietic stem cells (HSCs) results in expansion of myeloid progenitors and co-operates with oncogenic Kras in the initiation of an aggressive and fully transplantable acute leukaemia. Gene expression analysis and chromatin immunoprecipitation sequencing reveals differential regulation of a subset of PRC1-target genes including HSC-associated transcription factors such as Hoxa7/9. This study provides mechanistic understanding of how BCOR regulates cell fate decisions and how loss of function contributes to the development of leukaemia.