The goal of our studies has been to generate a human blood cell line that can be induced to differentiate to produce functional human blood cells. We have made significant progress towards this goal during the course of our work. We have identified a powerful signal that can drive generation of blood cells from human precursor cells. Further, we have defined conditions to promote growth of these cells for extended periods of time, and have developed strategies to trigger their development towards functional red blood cells. We have included several safety features in the design of our system as well to enhance its utility. Our long-term goal is to advance these studies towards clinical application so that the methods can be used to generate a safe and effective source of human red blood cells.