We studied monocytic differentiation of primary mouse progenitor cells to understand molecular mechanisms of differentiation. We found a tightly controlled non-apoptotic activation of caspase-3 that correlated with differentiation. Although caspase activity was already detected during monocytic differentiation, a caspase-3 target has not been identified yet. We show that hematopoietic progenitor kinase 1 (HPK1) is processed towards its N- and C-terminal fragments during monocytic differentiation. While HPK1 is an immunoreceptor-proximal kinase in T and B cells, its role in myeloid cells is elusive. Here, we show that the N-terminal cleavage product, HPK1-N, comprising the kinase domain, confers progenitor cell survival independent of the growth factor IL-3. Furthermore, HPK1-N causes differentiation of progenitor cells towards the monocytic lineage. In contrast to full-length kinase, HPK1-N is constitutively active causing sustained JNK activation, Bad phosphorylation and survival. Blocking of caspase activity during differentiation of primary mouse progenitor cells leads to reduced HPK1-N levels, suppressed JNK activity and attenuated monocytic differentiation. Our work explains growth factor-independent survival during monocytic differentiation by caspase-mediated processing of HPK1 towards HPK1-N.