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Human umbilical cord blood, an alternate source of haematopoietic stem cells (HSC), has been successfully used to reconstitute haematopoiesis in both related and unrelated transplant recipients. However, because CB has fewer total cells (and as a consequence fewer HSC and progenitor cells) CB transplant recipients often experience delayed engraftment as compared with that seen in bone marrow or mobilized peripheral blood transplant recipients. Delayed engraftment exposes patients to an increased risk of infection and bleeding. Cytokine-mediated expansion has been investigated to improve engraftment after CB HSC transplantation as a means to expand the total cell number and both the HSC and progenitors populations. However, its effect on HSC function remains controversial. We hypothesise that if cytokine-mediated expansion promotes divisional recruitment and multilineage differentiation it causes changes in phenotype and cell cycle related gene expression which may be detrimental to the engraftment capacity of haematopoietic cells. Therefore we investigated the relationship between cell division, phenotype and engraftment potential of CB CD34+ cells following cytokine-mediated expansion. High resolution cell division tracking using the fluorescent dye CFSE was used to monitor changes as a consequence of cytokine-mediated expansion in phenotype and function in CB CD34+ cells. Cytokine-mediated expansion caused upregulation of lineage and proliferation markers and adhesion molecules and downregulation of putative stem cell markers with concomitant cell division. However, these changes in phenotype as a consequence of cytokine-mediated expansion may not reflect or be predictive of a functional change in the expanded population. Cytokine-mediated expansion of CB CD34+ also caused changes in cell cycle related gene expression of G1 phase regulators. CB CD34+ cells exhibited expression of all D cyclins, albeit at different levels and p21WAF1 was differentially expressed across CB samples. The effect of cell division on the engraftment potential as a consequence of cytokine-mediated expansion was examined in CB CD34+. Cytokine-mediated expansion of CB CD34+ cells reduced, but did not completely eliminate engraftment potential, as a proportion of the expanded and divided cell populations retained their ability to engraft the NOD-SCID mouse. Overall, this study confirms reports in the literature that cytokine-mediated expansion induces changes in the phenotype of HSC and compromises their in vivo function.