Transforming growth factor β (TGFβ) is a potent inhibitor of hematopoietic stem and progenitor cell proliferation. However, the precise mechanism for this effect is unknown. Here, we have identified the transcription factor Gata2, previously described as an important regulator of hematopoietic stem cell function, as an early and direct target gene for TGFβ-induced Smad signaling in hematopoietic progenitor cells. We also report that Gata2 is involved in mediating a significant part of the TGFβ response in primitive hematopoietic cells. Interestingly, the cell cycle regulator and TGFβ signaling effector molecule p57 was found to be upregulated as a secondary response to TGFβ. We observed Gata2 binding upstream of the p57 genomic locus, and importantly, loss of Gata2 abolished TGFβ-stimulated induction of p57 as well as the resulting growth arrest of hematopoietic progenitors. Our results connect key molecules involved in hematopoietic stem cell self-renewal and reveal a functionally relevant network, regulating proliferation of primitive hematopoietic cells.