Enhancement of hematopoietic recovery after radiation, chemotherapy, or hematopoietic stem cell (HSC) transplantation is clinically relevant. Dipeptidylpeptidase (DPP4) cleaves a wide variety of substrates, including the chemokine stromal cell-derived factor-1 (SDF-1). In the course of experiments showing that inhibition of DPP4 enhances SDF-1-mediated progenitor cell survival, ex vivo cytokine expansion and replating frequency, we unexpectedly found that DPP4 has a more general role in regulating colony-stimulating factor (CSF) activity. DPP4 cleaved within the N-termini of the CSFs granulocyte-macrophage (GM)-CSF, G-CSF, interleukin-3 (IL-3) and erythropoietin and decreased their activity. Dpp4 knockout or DPP4 inhibition enhanced CSF activities both in vitro and in vivo. The reduced activity of DPP4-truncated versus full-length human GM-CSF was mechanistically linked to effects on receptor-binding affinity, induction of GM-CSF receptor oligomerization and signaling capacity. Hematopoiesis in mice after radiation or chemotherapy was enhanced in Dpp4(-/-) mice or mice receiving an orally active DPP4 inhibitor. DPP4 inhibition enhanced engraftment in mice without compromising HSC function, suggesting the potential clinical utility of this approach.