The yolk sac is the lone site of primitive hematopoiesis. The role of the yolk sac in generating definitive hematopoietic progenitors, however, has remained controversial. One complicating factor preventing an accurate investigation of this subject has been the onset of early circulation which alters the localization of hematopoietic progenitors. An Ncx1 knockout mouse (which fails to initiate a heartbeat) is used here to investigate the temporal and spatial distribution of definitive hematopoietic progenitor cells (HPCs: adult type BFU-E, CFU-GM, CFU-GEMM) in an environment lacking circulation. Embryos were harvested from timed pregnancies from Ncx1 heterozygote crosses beginning at the onset of circulation 8.5 days post conception (E8.5) and ending 36 hours later (E10). Developmental age was determined by somite pair number. All embryos were carefully separated from their yolk sacs and both samples were digested and plated in methylcellulose using a previously published definitive hematopoietic progenitor colony assay. Colonies were counted at seven days and then collected for genotyping. In embryos of all genotypes at E8.5, definitive HPCs were enriched more than 28 fold in the yolk sac compared to the embryo proper (EP), but following redistribution by a functional circulation in E10 wild type and heterozygous embryos, the ratio drops to a 3 fold enrichment in the yolk sac (similar to the 3–5 fold enrichment previously reported at this age; KM & JP, Blood 2003). Ncx1 null embryos lacking circulation produced few HPCs in the EP and never redistribute the HPCs as late as E10 resulting in a 72 fold enrichment in the yolk sac even at E10. Whole mount ζ-hemoglobin mRNA staining was carried out to visualize the distribution of blood cells in the yolk sac and embryo proper in the presence and absence of circulation. The staining pattern in null embryos confirms that cells from the yolk sac blood band remain in the yolk sac and are not found in the EP. Our findings support a model in which the primitive and definitive hematopoietic progenitors are generated in the yolk sac and are only redistributed to the EP upon the onset of circulation. Not only is the yolk sac an important source of definitive HPCs, it is the developing embryo’s primary source through E10.