The formation of blood, hematopoiesis, is a dynamic process originating from a small number of hematopoietic stem cells (HSCs). To sustain hematopoiesis throughout life HSCs have the unique capacity to differentiate into all mature hematopoietic lineages as well as generating more HSCs by a mechanism referred to as self-renewal. However, the regulation of these processes is largely unknown. During embryonic development HSCs expand in the fetal liver, indicating that this environment supports HSC self-renewal. The LIM-homeobox gene Lhx2 is expressed in the fetal liver during this period and Lhx2 null mutant mice die in utero due to severe anemia caused by an environmental defect in the fetal liver. Embryonic stem cells differentiate in vitro, forming embryoid bodies (EBs) containing various tissues including hematopoietic progenitor cells. Introduction of Lhx2 into this system by retroviral transfer led to the generation of cytokine dependent HSC-like cell lines that were multipotent and expressed surface markers similar to embryonic HSCs. However, the specificity and efficiency of this event could not be elucidated. To further evaluate the function of Lhx2 expression during hematopoietic development, Lhx2 was introduced into an ES cell system where expression could be efficiently turned on. This approach revealed that Lhx2 induce self-renewal of distinct multipotent hematopoietic progenitor/stem cells present in the EB, with the ability to form HSC-like cell lines. The Lhx2 induced self-renewal is growth factor specific since stem cell factor and interleukin-6 are necessary and sufficient for this process. However, Lhx2 expression blocked erythroid differentiation and interfered with early ES cell commitment, indicating that the effect of Lhx2 is cell type specific. Since HSCs of early embryonic origin are inefficient in engrafting adult recipients upon transplantation, we wanted to address whether we could generate cell lines retaining this capacity by expression of Lhx2 in hematopoietic cells from adult bone marrow. This led to the generation of clonal and cytokine dependent HSC-like cell lines capable of generating erythroid, myeloid and lymphoid cells upon transplantation into lethally irradiated recipients. When transplanted into stem cell-deficient mice, they contributed to circulating erythrocytes for at least 18 months, revealing a remarkable potential for self-renewal and differentiation in vivo. However, expression of Lhx2 was maintained in vivo and most engrafted mice developed a transplantable myeloproliferative disorder resembling human chronic myeloid leukemia. Thus, elucidation of the mechanism for Lhx2 function in HSC-like cell lines would give insights into both normal and pathological regulation of HSCs. Down-regulation of Lhx2 expression in HSC-like cell lines with inducible Lhx2 expression led to rapid loss of stem cell characteristics and differentiation into various hematopoietic cell types. Thus, global gene expression analysis comparing Lhx2+ HSC-like cell lines to their Lhx2- progeny would give insights into the molecular basis for Lhx2 function in stem cells. A number of differentially expressed genes overlapped with previously reported HSC enriched genes, further emphasizing the resemblance between HSCs and the HSC-like cell lines also at the molecular level. Moreover, a number of genes were identified with functions or expression patterns related to Lhx2 in other organs. Collectively, these data suggest that these HSC-like cell lines represent a relevant model system for normal HSCs on the molecular and the functional level as well as for evaluating Lhx2 function in the development of various tissues in the embryo as well as in disease.