An emerging concept in the field of cancer biology is that a rare population of ‘tumour stem cells’ exists among the heterogeneous group of cells that constitute a tumour. This concept, best described with human leukaemia, indicates that stem cell function (whether normal or neoplastic) might be defined by a common set of critical genes. Here we show that the Polycomb group gene Bmi-1 has a key role in regulating the proliferative activity of normal stem and progenitor cells. Most importantly, we provide evidence that the proliferative potential of leukaemic stem and progenitor cells lacking Bmi-1 is compromised because they eventually undergo proliferation arrest and show signs of differentiation and apoptosis, leading to transplant failure of the leukaemia. Complementation studies showed that Bmi-1 completely rescues these proliferative defects. These studies therefore indicate that Bmi-1 has an essential role in regulating the proliferative activity of both normal and leukaemic stem cells.