Hematopoietic stem cell transplantation (HSCT) is a successful treatment option for patients with malignant or non-malignant severe hematologic diseases. Readily available umbilical cord blood (CB) has emerged as an important donor source that has a lower histocompatability requirement and carries a reduced risk of graft vs. host disease. However, a frequent complication of CB use is delayed hematopoietic recovery, in particular long lasting severe thrombocytopenia (median of 117 days to platelet recovery, COBLT 2005). To overcome this clinically, effective strategies for enhancing megakaryopoiesis, thrombopoiesis, or both are needed. We have previously described the importance of CD26 (dipeptidylpeptidase IV) in engraftment (Christopherson, KW 2nd, et al, Science 2004. 305:1000–3). However, the involvement of CD26 in megakaryopoiesis has not been investigated. We hypothesized that CD26 acts to suppress megakaryopoiesis and that removal of CD26 activity would result in expansion of the megakaryocyte progenitor population in vivo. To test this hypothesis, we evaluated megakaryocyte (MK) development in the context of development of other mature blood cells in CD26 deficient (CD26−/ −) mice as compared to control C57BL/6 mice. Histological analysis of formalin fixed paraffin embedded tissue sections and peripheral blood cytopsins revealed an increased presence of MK in the bone marrow, spleen, thymus and peripheral blood. However, complete blood counts (CBC) suggest no difference in white blood cell, neutrophil, lymphocyte, monocyte, eosinophil, basophil, and platelet counts. Flow cytometric analysis also revealed no significant changes in CD3, CD4, or CD8 T-cells; B220 B-cells; and Gr-1/Mac-1 granulocytes/neutrophils in the bone marrow, spleen, thymus, or peripheral blood as appropriate. There was also no change in the percentage of peripheral blood CD41 MK but there was a increase from 0.09% in C57BL/6 BM to 0.26% CD41+Sca-1+c-kit− MK progenitors in the CD26−/ − BM (P≤0.05). Methylcellulose based myeloid progenitor assays did also reveal respective CFU-GM, BFU-E, and CFU-GEMM per femur values (mean±SEM) of 24480±1426, 1448±154.86, and 852±41 for C57BL/6 BM cells; 24451±1342, 974.29±81, and 1634±177 for CD26−/ − BM cells. This represents a 92% increase in CFU-GEMM and corresponding 30% decrease in BFU-E in the CD26−/ − mouse BM (P≤0.01, n=7 mice/group). Collagen based megakaryocyte progenitor assays (CFU-MK) revealed a 25% increase from 4455.00±207.62 colonies/femur in C57BL/6 BM to 5555.00±608.12 in CD26−/ − BM (P≤0.05, n=3 mice/group). These results establish a basis on which to propose that CD26 may act to regulate early events in megakaryocyte progenitor formation and function. They also suggest that the use of CD26 inhibitors may have a beneficial effect on improved megakaryocyte progenitor function and/or reconstitution post-transplant.