We made good progress during the 08-09 funding period. We finished the critical work of screening 8 independent hESC lines for their ability to generate hematopoietic cells. This included 6 non-NIH-approved lines, studies that could only be performed through the innovative mechanism of CIRM funding, not through federal funding mechanisms. Interestingly, we found no meaningful differences among the lines, and are now able to focus on a single line. As a key part of achieving our goals, we generated a robust data set of miRNAs expressed in 3 different hESC lines and 4 independent human HSC samples. These data are now being scrutinized to identify possible miRNA candidates to test for their role in the development of HSCs from hESCs as well as the development/use of our more global miRNA screen. Regarding the larger miRNA screen, we now have a library that we think efficiently expresses miRNAs in hESCs, which was achieved by changing the promoter in our prior library. We are very optimistic about the new library; virus stocks are being made and will be tested in the near term. We also established and extensively characterized our mouse transplant model using human HSCs, and in the second half of the year performed many transplants of hESC-derived cells. To date we have not succeeded in identifying an engrafted HSC, but we have a number of ideas to try in year 3 to help us overcome this obstacle. We knew that this would be a huge hurdle, so while the lack of success in the transplants to date is not what we wished to have seen, it is not a major surprise. Nonetheless, we hope to overcome this problem with new ideas and studies that will be performed in funding year 3.