The presence of rare malignant stem cells supplying a hierarchy of malignant cells has recently been reported. In human acute myelogenous leukemia (AML), the leukemia stem cells (LSCs) have been phenotypically restricted within the CD34+ CD38− fraction. To understand the origin of malignant cells in primary human B-precursor acute lymphocytic leukemia (B-ALL), we established a novel in vivo xenotransplantation model. Purified CD34+ CD38+ CD19+, CD34+ CD38− CD19+ and CD34+ CD38− CD19− bone marrow (BM) or peripheral blood (PB) cells from three pediatric B-ALL patients were intravenously injected into sublethally irradiated newborn NOD/SCID/IL2rγ null mice. We found that both CD34+ CD38+ CD19+ and CD34+ CD38− CD19+ cells initiate B-ALL in primary recipients, whereas the recipients of CD34+ CD38− CD10− CD19− cells showed normal human hematopoietic repopulation. The extent of leukemic infiltration into the spleen, liver and kidney was similar between the recipients transplanted with CD34+ CD38+ CD19+ cells and those transplanted with CD34+ CD38− CD19+ cells. In each of the three cases studied, transplantation of CD34+ CD38+ CD19+ cells resulted in the development of B-ALL in secondary recipients, demonstrating self-renewal capacity. The identification of CD34+ CD38+ CD19+ self-renewing B-ALL cells proposes a hierarchy of leukemia-initiating cells (LICs) distinct from that of AML. Recapitulation of patient B-ALL in NOD/SCID/IL2rγ null recipients provides a powerful tool for directly studying leukemogenesis and for developing therapeutic strategies.