Our principle goal is to understand the molecular processes of hematopoietic stem cell (HSC) emergence and development. Towards this we have developed a pluripotent stem cell differentiation system that generates hematopoietic cells through distinct developmental stages. We have identified several subpopulations of cells in this developmental process, including cells undergoing endothelial-to-hematopoietic transition (EHT). This transition is a critical step for the generation of HSCs, and we are first to be able to sort and functionally differentiate the cells in human setting. This provides a platform for the identification and evaluation of novel factors required in the developmental processes for de novo blood generation. We have identified a number of critical factors influencing various stages of the developmental commitment towards the blood lineage and have used these factors to increased both function and numbers of the most primitive hematopoietic cells (including hematopoietic cells with lymphoid and myeloid differentiation potential). The ultimate goal of our research is to be able to provide an alternative and unlimited source of HSCs using pluripotent stem cells for use in patients with blood disorders and malignancies.