The AML1:CBFβ transcription factor complex is essential for definitive hematopoiesis. Null mutations in mouse AML1 result in midgestational lethality with a complete lack of fetal liver hematopoiesis. While the cell autonomous nature and expression pattern of AML1 suggest an intrinsic role for this transcription factor in the developing hematopoietic system, no direct link to a functional cell type has been made. Here, we examine the consequences of AML1 loss in hematopoietic stem cells (HSC) of the mouse embryo. We demonstrate an absolute requirement for AML1 in functional HSCs. Moreover, haploinsufficiency results in a dramatic change in the temporal and spatial distribution of HSCs, leading to their early appearance in the normal position in the aorta-gonad-mesonephros region and also in the yolk sac.