Over the past year, we have made excellent progress on my CIRM New Investigator Award. We have demonstrated using direct imaging approaches that hematopoietic stem cells (HSCs) are born from hemogenic endothelial cells lining the ventral floor of the dorsal aorta (Bertrand and Chi et al., Nature 464: 108-111). This finding has allowed us to refine our approaches, knowing now that HSC specification requires transition through an aortic endothelial intermediate. Moving forward, our major goals are to understand how Wnt and Notch signaling integrate to regulate the specification of hemogenic endothelium. Our efforts over the past year have demonstrated that Wnt16 acts as a novel regulator of HSC fate through its regulation of two Notch ligands. Intriguingly, this pathway is non-cell autonomous with respect to HSCs and thus represents one of the earliest known extrinsic regulators of HSC fate specification. Our discovery of this pathway may therefore be a critical link that has been missing in the efforts to instruct HSCs in vitro from pluripotent precursors.