The early events that drive hematologic disorders like clonal hematopoiesis, myelodysplastic syndrome, myeloproliferative neoplasm, and acute myeloid leukemia are not well understood. Most studies focus on the cell-intrinsic genetic changes that occur in these disorders and how they impact cell fate decisions. We consider how chronic exposure to the pro-inflammatory cytokine, interleukin-1; (IL-1), impacts Cebpa-deficient hematopoietic stem and progenitor cells (HSPC) in competitive settings. We surprisingly found that Cebpa-deficient HSPC did not have a hematopoietic cell intrinsic competitive advantage; rather chronic IL-1; exposure engendered potent selection for Cebpa loss. Chronic IL-1; augments myeloid lineage output by activating differentiation and repressing stem cell gene expression programs in a Cebpa-dependent manner. As a result, Cebpa-deficient HSPC are resistant to the pro-differentiative effects of chronic IL-1, and competitively expand. These findings have important implications for the earliest events that drive hematologic disorders, suggesting that chronic inflammation could be an important driver of leukemogenesis and a potential target for intervention.