Recent discoveries demonstrate that leukemia stem cells (LSCs) contribute towards leukemia progression and relapse. Several cell surface and intra-cellular markers including CD34+CD38-, CD123, aldehyde dehydrogenase (ALDH), side-population (SP) dye uptake, and TIM3 have been utilized to detect these cells, but the origin of LSCs has not been clearly understood. Here, we demonstrate for the first time that components of the bone marrow micro-environment (BME) such as mesenchymal stromal cells (MSCs) and hypoxia induce a stem cell phenotype in acute myeloid leukemia (AML) cells. Co-culture of AML cells with bone marrow (BM)-derived MSCs induced a time-dependent increase in ALDH activity (from 5.8 ± 3.3% to 36.9 ± 4.7%, p<0.01) in the leukemia cells. In addition, culture of AML cells in 1% oxygen increased the ALDH-active population from 0.5% ± 0.1% to 25.6% ± 3.2% (p<0.01), suggesting that stroma and hypoxia were sufficient by themselves for the induction of stem cell activity in leukemia cells. In addition, when AML cells were co-cultured with MSCs, SP cells were induced (from 0.2 ± 0.1% to 2.6 ± 0.8%; p<0.02). Similarly, SP cell phenotype was induced (from 0.2 ± 0.1% to 10.2 ± 2.4%; p<0.01) in AML cells cultured under hypoxia conditions, indicating that the micro-environment induces “stemness” in leukemia cells. Cell cycle analysis revealed that in OCI-AML3 cells cultured under hypoxic conditions, the S-phase cell population was reduced from 14.5 ± 0.1% to 5.02 ± 0.1% and cells G0/G1- increased from 68.02 ± 3.1% to 87.62 ± 2.7%, indicating that the leukemic cells become relatively quiescent in micro-environmental conditions. To examine the functional significance of stem-like changes, we analyzed chemo-resistance of leukemia cells. AML cells cultured under BME conditions were found to be >75% ± 8% resistant (based on AnnexinV+/PI+ staining) to cytrabine at 1, 2.5 and 5µM concentrations. Gene expression assessed by micro array and real-time RT-PCR of 19 ALDH isoforms identified ALDH1A3 and ALDH1A1 as upregulated by 10- and 3-fold, respectively in the leukemia cells cultured under BME conditions, suggesting that the increased ALDH activity was due to the upregulation of these ALDH isoforms. In addition, the embryonic stem cell markers oct4, nanog, and sox2, were distinctly upregulated by at least 2-fold when the leukemic cells were cultured in hypoxia. Recent findings from Look's group indicate an autocrine activation of cMet in AML. To investigate the expression of cMet, and its ligand hepatocyte growth factor (HGF), leukemia cells cultured under BME conditions were FACS-sorted and cMet expression was analyzed by qRT-PCR. We found that cMet expression increased by 8- to 10-fold in leukemia cells cultured under these conditions. In addition, cytokine antibody arrays revealed that HGF was upregulated by 6- to 8-fold in cell culture supernatants derived from the BME culture conditions. These data suggest a role for cMet signaling in the acquisition of stem cell features. Finally, to identify additional molecular factors that support our hypothesis, we performed a proteomics analysis using Kinexus® antibody arrays with 850 validated phospho and total proteins. These data revealed that proteins including β-catenin, Stat3, and Stat5B were upregulated, whereas GSK3a, p38a (T180+Y182), and IKKb were downregulated in the leukemic cells cultured under the BME conditions. Summary: the bone marrow microenvironment induces a stem cell-like phenotype in leukemia cells. We have identified several key signaling pathways including cMet, Wnt, NFκB and Stat3 that may lead to acquisition of stem cell phenotype under the influence of the BME. These factors may also facilitate leukemic cell survival during chemotherapy. Disclosures:No relevant conflicts of interest to declare.