Polycomb repressive complex 2 (PRC2) catalyzes the monomethylation, dimethylation, and trimethylation of histone H3 Lys27 (H3K27) and acts as a central epigenetic regulator that marks the repressive chromatin domain. Embryonic ectoderm development (EED), an essential component of PRC2, interacts with trimethylated H3K27 (H3K27me3) through the aromatic cage structure composed of its three aromatic amino acids, Phe97, Trp364, and Tyr365. This interaction allosterically activates the histone methyltransferase activity of PRC2 and thereby propagates repressive histone marks. In this study, we report the analysis of knock-in mice harboring the myeloid disorder-associated EED Ile363Met (I363M) mutation, analogous to the EED aromatic cage mutants. The I363M homozygotes displayed a remarkable and preferential reduction of H3K27me3 and died at midgestation. The heterozygotes increased the clonogenic capacity and bone marrow repopulating activity of hematopoietic stem/progenitor cells (HSPCs) and were susceptible to leukemia. Lgals3, a PRC2 target gene encoding a multifunctional galactose-binding lectin, was derepressed in I363M heterozygotes, which enhanced the stemness of HSPCs. Thus, our work provides in vivo evidence that the structural integrity of EED to H3K27me3 propagation is critical, especially for embryonic development and hematopoietic homeostasis, and that its perturbation increases the predisposition to hematologic malignancies.histone methylation | repressive histone marks | hematologic malignancies