Experimentation on human stem cells is hampered by the relative paucity of this population and by the lack of assays identifying multilineage differentiation, particularly along the lymphoid lineages. In our current study, phenotypic analysis of low-density fetal bone marrow cells showed two distinct populations of CD34+ cells: those expressing a high density of CD34 antigen on their surface (CD34hi) and those expressing an intermediate level of CD34 antigen (CD34lo). Multiple tissues were used to characterize the in vitro and in vivo potential of these subsets and showed that only CD34hi cells support long-term B lymphopoiesis and myelopoiesis in vitro and mediate T, B, and myeloid repopulation of human tissues implanted into SCID mice. CD34lo cells repeatedly failed to provide long-term hematopoietic activity in vivo or in vitro. These results indicate that a simple fractionation based on well-defined CD34 antigen levels can be used to reproducibly isolate cells highly enriched for in vivo long-term repopulating activity and for multipotent progenitors, including T- and B-cell precursors. Additionally, given the limited variability in the results and the high correlation between in vitro and in vivo hematopoietic potential, we propose that the CD34hi population contains virtually all of the stem cell activity in fetal bone marrow and therefore is the population of choice for future studies in hematopoietic stem cell development and gene therapy.