Hematopoietic stem cells (HSC) transplanted in utero are in competition with endogenous HSC; thus, ultimately the graft constitutes a relatively small fraction of total HSC pool. To enhance the engraftment of donor cells in sheep fetuses, we preincubated these cells, ex vivo, for 16 hours at 37 degrees C with the conditioned medium from phytohemagglutinin-stimulated lymphocytes (PHA-LCM) before in utero transplantation. PHA-LCM is a rich source of hematopoietic growth factors in sheep. Subsequent engraftment was significantly higher in cells preincubated with PHA-LCM compared with fresh cells or those incubated with control medium only. This was reflected in all markers of the donor cells (hemoglobin type, karyotype, and progenitor cell assays). Brief ex vivo incubation with PHA-LCM also increased viability of all marrow cells as well as total numbers of progenitors. Similar enhancement of engraftment was also noted in monkeys after a brief preincubation of donor cells with interleukin-3 (IL-3) and granulocyte- macrophage colony-stimulating factor (GM-CSF). We conclude that brief (16 hours) ex vivo incubation of donor cells with a source of such growth factors as IL-3 and GM-CSF enhances the subsequent engraftment of transplanted cells.