Oxysterols are oxygenated derivatives of cholesterol that contain an additional hydroxy, epoxide, or ketone group in the sterol nucleus and/or a hydroxyl group in the side chain of the cholesterol molecule. 27-Hydroxycholesterol (27HC) is a side-chain oxysterol that is oxygenated at the 27th carbon atom of cholesterol. The oxysterol (27HC) is produced via oxidation by sterol 27-hydroxylase (CYP27A1) and metabolized via oxysterol 7a-hydroxylase (CYP7B1) for bile acid synthesis in the liver. A previous study has demonstrated that treatment with the alternative Estrogen receptor alpha (ERα) ligand 27HC induces ERα-dependent hematopoietic stem cell (HSC) mobilization. In addition, Cyp27a1-deficient mice demonstrate significantly reduced 27HC levels and HSC mobilization. Here, we report that exogenous 27HC treatment leads to a substantial reduction in the hematopoietic stem and progenitor cell (HSPC) population owing to significantly increased reactive oxygen species (ROS) levels and apoptosis in the bone marrow (BM). However, 27HC does not influence the population of mature hematopoietic cells in the BM. Furthermore, exogenous 27HC treatment suppresses cell growth and promotes ROS production and apoptosis in leukemic cells. Moreover, acute myeloid leukemia (AML) patients with high CYP7B1 expression (expected to have inhibition of 27HC) had significantly shorter survival than those with low CYP7B1 expression (expected to have an elevation of 27HC). Single-cell RNA-sequencing (scRNA seq) analysis revealed that the expression of CYP7B1 was significantly increased in AML patients. Thus, our study suggests that 27HC may serve as a potent agent for regulating pools of HSPCs and may have an application as a novel therapeutic target for hematological malignancies. Collectively, pharmacological inhibition of CYP7B1 (expected to have an elevation of 27HC) would potentially have fewer long-term hematological side effects, particularly when used in combination with chemotherapy or radiation for the treatment of leukemia patients.