Hematopoietic cells are regulated in part by extracellular cues from cytokines. Leukemia inhibitory factor (LIF) promotes survival, self-renewal, and pluripotency of mouse embryonic stem cells (mESC). While genetic deletion of LIF affects hematopoietic progenitor cells (HPCs), the direct effect of LIF protein exposure on HPC survival is not known. Furthermore, post-translational modifications (PTM) of LIF and their effects on its function have not been evaluated. We demonstrate that treatment with recombinant LIF preserves mouse and human HPC numbers in stressed conditions when growth factor addition is delayed ex vivo. We show that Lif is upregulated in response to irradiation-induced stress. We reveal novel PTM of LIF where it is cleaved twice by dipeptidyl peptidase 4 (DPP4) protease so that it loses its 4 N-terminal amino acids. This truncation of LIF down-modulates LIF’s ability to preserve functional HPC numbers ex vivo following delayed growth factor addition. DPP4-truncated LIF blocks the ability of full-length LIF to preserve functional HPC numbers. This LIF role and its novel regulation by DPP4 have important implications for normal and stress hematopoiesis, as well as for other cellular contexts in which LIF and DPP4 are implicated.