Our goal has been to improve the microenvironment where human embryonic stem cells (hESC) differentiate in order to generate functional hematopoietic stem/progenitor cells (HS/PC) in culture, with the ultimate goal to use these HS/PCs for the treatment of leukemias and other blood diseases. We have tested various human and mouse stroma lines for their ability to support expansion of multipotential human HS/PCs as well as hematopoietic specification from hESCs. So far mouse mesenchymal stem cells (MSC) have proven to provide the best supportive ability for human hematopoiesis. By combining embryoid body differentiation and co-culture on mouse MSC stroma, we have succesfully generated HS/PCs that phenotypically resemble bona fide human HSCs (CD34+CD38-CD90+CD45+). However, so far their differentiation ability has been biased toward myeloerythroid cells, with poor ability to generate B-cells in culture. Based on microarray data that we obtained from a related project supported by the CIRM New Faculty Award, we have identified molecular programs that are defective in hES derived HS/PCs. Future efforts will be directed in modifying the culture microenvironment as well as the cell intrinsic regulatory machinery in hES derived HS/PCs in order to improve their differentiation and self-renewal potential.