Hematopoietic stem cells (HSCs) are protected in a metabolically dormant state within the bone marrow stem cell niche. Inflammation has been shown to disrupt HSC dormancy and cause multiple functional changes. Here, we investigated whether HSC functions were altered in systemic lupus erythematosus (SLE)-prone mice and whether this contributed to clinical manifestations of SLE. We found that HSCs were significantly expanded in lupus mice. The increase in HSC cellularity was caused by both genetic lupus risk factors and inflammatory cytokines in lupus mice. In addition, the inflammatory conditions of lupus led to HSC mobilization and lineage-biased hematopoiesis. Strikingly, these functionally altered HSCs possessed robust self-renewal capacity and exhibited repopulating advantages over wild-type HSCs. A single-nucleotide polymorphism in the cdkn2c gene encoding p18^INK4c within a SLE susceptibility locus was found to account for reduced p18^INK4c expression and the increase in HSC self-renewal capacity in lupus mice. Lupus HSCs with enhanced self-renewal capacity and resistance to stress may compete out transplanted healthy HSCs, thereby leading to relapses after HSC transplantation.