ASXL1 mutations are frequently found in hematological tumors, and loss of Asxl1 promotes myeloid transformation in mice. Here we present data supporting a role for an ASXL1-BAP1 complex in the deubiquitylation of mono-ubiquitylated lysine 119 on Histone H2A (H2AK119ub1) in vivo. The Polycomb group proteins control the expression of the INK4B-ARF-INK4A locus during normal development, in part through catalyzing mono-ubiquitylation of H2AK119. Since the activation of the locus INK4B-ARF-INK4A plays a fail-safe mechanism protecting against tumorigenesis, we investigated whether ASXL1-dependent H2A deubiquitylation plays a role in its activation. Interestingly, we found that ASXL1 is specifically required for the increased expression of p15(INK4B) in response to both oncogenic signaling and extrinsic anti-proliferative signals. Since we found that ASXL1 and BAP1 both are enriched at the INK4B locus, our results suggest that activation of the INK4B locus requires ASXL1/BAP1-mediated deubiquitylation of H2AK119ub1. Consistently, our results show that ASXL1 mutations are associated with lower expression levels of p15(INK4B) and a proliferative advantage of hematopoietic progenitors in primary bone marrow cells, and that depletion of ASXL1 in multiple cell lines results in resistance to growth inhibitory signals. Taken together, this study links ASXL1-mediated H2A deubiquitylation and transcriptional activation of INK4B expression to its tumor suppressor functions.