Top of pageAbstract Differentiation of embryonic stem (ES) cells in vitro yields abundant hematopoietic progenitors, but achieving stable hematopoietic engraftment of irradiated mice has proven difficult, begging the question of whether ES cells give rise to transplantable hematopoietic stem cells (HSCs) in vitro, and limiting the application of ES cells in experimental and therapeutic models. In an effort to characterize factors that differentiate primitive progenitors derived from yolk sac or ES cells into transplantable HSCs, we have examined the effect of conditional expression of several transgenes linked to leukemogenesis, cytokine signaling, or blood formation in model organisms. These genes include the oncoprotein BCR/ABL, the signal transducer STAT5, the bHLH transcription factor SCL, the homeotic selector gene HoxB4 implicated in self-renewal of definitive HSCs, and Cdx4, an upstream regulator of Hox gene expression. BCR/ABL enables engraftment of animals with hematopoietic cells that exhibit multi-lineage differentiation potential, but leukemia invariably develops. STAT5 activation enhances hematopoietic proliferation in vitro but enables only limited, transient multi-lineage engraftment after transplantation of irradiated mice. Induction of SCL appears to enhance hematopoietic commitment during ES differentiation but does not promote hematopoietic engraftment. Expression of HoxB4 in primitive progenitors combined with culture on hematopoietic stroma enables generates transplantable cells with a definitive HSC phenotype. These progenitors engraft lethally irradiated adults and contribute to long-term, multi-lineage hematopoiesis in primary and secondary recipients. Cdx4 further enhances the capacity for HSC generation from ES cells. We have used HoxB4 modification of ES-derived HSCs to enable therapeutic transplantation with products of ES cells, including a proof-of-principle application of therapeutic cloning to treat an immunodeficient Rag2−/− mouse, and efforts are underway in murine models of thalassemia. Our studies in the blood forming system are laying a foundation for similar studies in germ cell development, and to applications with human ES cells.