We have previously reported the ability of uncharacterized human bone marrow (BM) cells to engraft into preimmune fetal sheep, thereby creating sheep-human chimera suitable for in vivo examination of the properties of human hematopoietic stem cells (HSC). Adult human bone marrow CD34+ HLA-DR- cells have been extensively characterized in vitro and have been demonstrated to contain a number of primitive hematopoietic progenitor cells (PHPC). However, the capacity of such highly purified populations of human marrow CD34+ HLA-DR- cells to undergo in vivo self-renewal and multipotential lymphohematopoietic differentiation has not been previously demonstrated. To achieve that, human CD34+ HLA-DR- cells were transplanted in utero into immunoincompetent fetal sheep to investigate the BM-populating potential of these cells. Long-term chimerism, sustained human hematopoiesis, and expression of human cells belonging to all human blood cell lineages were demonstrated in two animals for more than 7 months' posttransplantation. Chimeric BM contained erythroid, granulocytic/monocytic, and megakaryocytic hematopoietic progenitor cells, as well as the primitive high proliferative potential colony- forming cell (HPP-CFC). Under a variety of in vitro experimental conditions, chimeric BM cells gave rise to human T cells expressing T- lymphocyte-specific markers, human natural killer (NK) cells, and human IgG-producing B cells. In vivo expansion and possibly self-renewal of transplanted PHPC was confirmed by the detection in chimeric BM 130 days' posttransplantation of CD34+ HLA-DR- cells, the phenotype of human cells constituting the stem-cell graft. These studies demonstrate not only the BM-populating capacity, multipotential differentiation, and most likely self-renewal capabilities of human CD34+ HLA-DR- cells, but also that this BM population contains human HSC. Furthermore, it appears that this animal model of xenogeneic stem-cell transplantation is extremely useful for in vivo examination of human hematopoiesis and the behavioral and functional characteristics of human HSC.