THE chemokines are a large family of small, structurally related cytokines^1,2. The physiological importance of most members of this family has yet to be elucidated, although some are inducible inflammatory mediators that determine leukocyte chemotaxis^1–5. Pre-B-cell growth-stimulating factor/stromal cell-derived factor-1 (PBSF/SDF-1) is a member of the CXC group of chemokines^6,7. PBSF/SDF-1 stimulates proliferation of B-cell progenitors in vitro⁶ and is constitutively expressed in bone-marrow-derived stromal cells^6,7. Here we investigate the physiological roles of PBSF/SDF-1 by generating mutant mice with a targeted disruption of the gene encoding PBSF/SDF-1. We found that mice lacking PBSF/SDF-1 died perinatally and that although the numbers of B-cell progenitors in mutant embryos were severely reduced in fetal liver and bone marrow, myeloid progenitors were reduced only in the bone marrow but not in the fetal liver, indicating that PBSF/SDF-1 is responsible for B-cell lymphopoiesis and bone-marrow myelopoiesis. In addition, the mutants had a cardiac ventricular septal defect. Hence, we have shown that the chemokine PBSF/SDF-1 has several essential functions in development.