We have discovered that cells derived from the skeletal muscle of adult mice contain a remarkable capacity for hematopoietic differentiation. Cells prepared from muscle by enzymatic digestion and 5-day in vitro culture were harvested, and 18 × 10³ cells were introduced into each of six lethally irradiated recipients together with 200 × 10³ distinguishable whole bone marrow cells. After 6 or 12 weeks, all recipients showed high-level engraftment of muscle-derived cells representing all major adult blood lineages. The mean total contribution of muscle cell progeny to peripheral blood was 56 ± 20% (SD), indicating that the cultured muscle cells generated approximately 10- to 14-fold more hematopoietic activity than whole bone marrow. When bone marrow from one mouse was harvested and transplanted into secondary recipients, all recipients showed high-level multilineage engraftment (mean 40%), establishing the extremely primitive nature of these stem cells. We also show that muscle contains a population of cells with several characteristics of bone marrow-derived hematopoietic stem cells, including high efflux of the fluorescent dye Hoechst 33342 and expression of the stem cell antigens Sca-1 and c-Kit, although the cells lack the hematopoietic marker CD45. We propose that this population accounts for the hematopoietic activity generated by cultured skeletal muscle. These putative stem cells may be identical to muscle satellite cells, some of which lack myogenic regulators and could be expected to respond to hematopoietic signals.