Embryonic stem (ES) cells have the potential to serve as an alternative source of hematopoietic precursors for transplantation and for the study of hematopoietic cell development. Using coculture of human ES (hES) cells with OP9 bone marrow stromal cells, we were able to obtain up to 20% of CD34⁺ cells and isolate up to 10⁷ CD34⁺ cells with more than 95% purity from a similar number of initially plated hES cells after 8 to 9 days of culture. The hES cell–derived CD34⁺ cells were highly enriched in colony-forming cells, cells expressing hematopoiesis-associated genes GATA-1, GATA-2, SCL/TAL1, and Flk-1, and retained clonogenic potential after in vitro expansion. CD34⁺ cells displayed the phenotype of primitive hematopoietic progenitors as defined by co-expression of CD90, CD117, and CD164, along with a lack of CD38 expression and contained aldehyde dehydrogenase–positive cells as well as cells with verapamil-sensitive ability to efflux rhodamine 123. When cultured on MS-5 stromal cells in the presence of stem cell factor, Flt3-L, interleukin 7 (IL-7), and IL-3, isolated CD34⁺ cells differentiated into lymphoid (B and natural killer cells) as well as myeloid (macrophages and granulocytes) lineages. These data indicate that CD34⁺ cells generated through hES/OP9 coculture display several features of definitive hematopoietic stem cells.