Children with neurofibromatosis type 1 (NF1) are predisposed to juvenile myelomonocytic leukemia (JMML), an aggressive myeloproliferative neoplasm (MPN) that is refractory to conventional chemotherapy. Conditional inactivation of the Nf1 tumor suppressor in hematopoietic cells of mice causes a progressive MPN that accurately models JMML and chronic myelomonocytic leukemia (CMML). We characterized the effects of Nf1 loss on immature hematopoietic populations and investigated treatment with the MEK inhibitor PD0325901 (hereafter called 901). Somatic Nf1 inactivation resulted in a marked expansion of immature and lineage-committed myelo-erythroid progenitors and ineffective erythropoiesis. Treatment with 901 induced a durable drop in leukocyte counts, enhanced erythropoietic function, and markedly reduced spleen sizes in mice with MPN. MEK inhibition also restored a normal pattern of erythroid differentiation and greatly reduced extramedullary hematopoiesis. Remarkably, genetic analysis revealed the persistence of Nf1-deficient hematopoietic cells, indicating that MEK inhibition modulates the proliferation and differentiation of Nf1 mutant cells in vivo rather than eliminating them. These data provide a rationale for performing clinical trials of MEK inhibitors in patients with JMML and CMML.