To directly study complex human hemato-lymphoid system physiology and respective system-associated diseases in vivo, human-to-mouse xenotransplantation models for human blood and blood-forming cells and organs have been developed over the past three decades. We here review the fundamental requirements and the remarkable progress made over the past few years in improving these systems, the current major achievements reached by use of these models, and the future challenges to more closely model and study human health and disease and to achieve predictive preclinical testing of both prevention measures and potential new therapies.