Mesenchymal stem cells (MSC) have been described to support the maintainance and expansion of clonogenic hematopoietic cells in vitro and as progenitors for nonhematopoietic tissues. They clearly can be distinguished from hematopoietic cells by the surface markers CD45 and CD34. We investigated the potential of human MSC to form blood and endothelial cells. Human MSC in expansion cultures expressed RNA for CD117 and EpoR but not for other hematopoietic antigens. Many transcription factors essential for blood cell differentiation, e.g. c-mpl, Notch-1, Gata-2 and -3, Runx-1 and SCL, were detected in these cells. We used different differentiation strategies: A) Hematopoietic differentiation: 1. Prestimulation in IMDM + fetal calf serum (FCS) + horse serum (HS), mixed with methylcellulose (MC, containing cytokines SCF, IL-3, IL-6, G-CSF, GM-CSF and Epo) and differentiation in MC; 2. Prestimulation in serum free medium supplemented with SCF, TPO, GM-CSF and flt.- 3 ligand and differentiation in serum free MC; B) Endothelial differentiation: Prestimulation in serum free medium supplemented with SCF, TPO, and flt-3L and differentiation in medium + VEGF + bFGF + IGF. Using FACS-analysis, we detected up to 1.8 % CD34-positive cells within 2 weeks. Immunochemically we observed cells positive for CD45, CD34, CD133, CD14, CD16 and CD41. Although hMSC do not form colonies after seeding in MC, after prestimulation we observed colonies with the typical appearance of BFU-E which were GlycophorinA positive. Under endothelial conditions we detected cells positive for CD34 and KDR or CD31 and vWF. However, cell numbers of positive cells were low and therefore RT-PCR results were not very reliable. To confirm the differentiation capacity of MSC we generated CD45.2 mouse MSC (P9 what took about 6 month) and transplanted into lethally irradiated CD45.1 recipient mice. Four weeks after transplantation mice showed normal white blood cell counts but still decreased platelet counts. Analysis of donor chimerism 29 weeks after transplantation revealed up to 36 % (14.3±7.9%) donor cells in peripheral blood, mainly in the CD11b positive myeloid population but not in lymphoid cells. In thymus and bone marrow, marginal donor chimerism (3±0.8%) was detected, but the number in c-kit+ cells reached up to 28.2% (7.9±6.8%). In B-cells and erythroid progenitors chimerism was low but stable, but not in CD3+ cells. Taken together, we have shown that under the right conditions MSC are able to form blood and endothelial cells and reconstitute animals. We suggest that MSC could be an yet unrecognised precursor for both cell types and may contain the long searched hemangioblast in adult organisms.