Recent studies have implicated the innate immunity system in the pathogenesis of myelodysplastic syndromes (MDS). Toll-like receptor (TLR) genes encode key innate immunity signal initiators. We recently identified multiple genes, known to be regulated by TLRs, to be overexpressed in MDS bone marrow (BM) CD34+ cells, and hypothesized that TLR signaling is abnormally activated in MDS. We analyzed a large cohort of MDS cases and identified TLR1, TLR2 and TLR6 to be significantly overexpressed in MDS BM CD34+ cells. Deep sequencing followed by Sanger resequencing of TLR1, TLR2, TLR4 and TLR6 genes uncovered a recurrent genetic variant, TLR2-F217S, in 11% of 149 patients. Functionally, TLR2-F217S results in enhanced activation of downstream signaling including NF-κB activity after TLR2 agonist treatment. In cultured primary BM CD34+ cells of normal donors, TLR2 agonists induced histone demethylase JMJD3 and interleukin-8 gene expression. Inhibition of TLR2 in BM CD34+ cells from patients with lower-risk MDS using short hairpin RNA resulted in increased erythroid colony formation. Finally, RNA expression levels of TLR2 and TLR6, as well as presence of TLR2-F217S, are associated with distinct prognosis and clinical characteristics. These findings indicate that TLR2-centered signaling is deregulated in MDS, and that its targeting may have potential therapeutic benefit in MDS.