Recurrent mutations in the gene encoding additional sex combs-like 1 (ASXL1) are found in various hematologic malignancies and associated with poor prognosis. In particular, ASXL1 mutations are common in patients with hematologic malignancies associated with myelodysplasia, including myelodysplastic syndromes (MDSs), and chronic myelomonocytic leukemia. Although loss-of-function ASXL1 mutations promote myeloid transformation, a large subset of ASXL1 mutations is thought to result in stable truncation of ASXL1. Here we demonstrate that C-terminal–truncating Asxl1 mutations (ASXL1-MTs) inhibited myeloid differentiation and induced MDS-like disease in mice. ASXL1-MT mice displayed features of human-associated MDS, including multi-lineage myelodysplasia, pancytopenia, and occasional progression to overt leukemia. ASXL1-MT resulted in derepression of homeobox A9 (Hoxa9) and microRNA-125a (miR-125a) expression through inhibition of polycomb repressive complex 2–mediated (PRC2-mediated) methylation of histone H3K27. miR-125a reduced expression of C-type lectin domain family 5, member a (Clec5a), which is involved in myeloid differentiation. In addition, HOXA9 expression was high in MDS patients with ASXL1-MT, while CLEC5A expression was generally low. Thus, ASXL1-MT–induced MDS-like disease in mice is associated with derepression of Hoxa9 and miR-125a and with Clec5a dysregulation. Our data provide evidence for an axis of MDS pathogenesis that implicates both ASXL1 mutations and miR-125a as therapeutic targets in MDS.