The precise time of appearance of the first hematopoietic stem cell activity in the developing mouse embryo is unknown. Recently the aorta-gonad-mesonephros region of the developing mouse embryo has been shown to possess hematopoietic colony-forming activity (CFU-S) in irradiated recipient mice. To, determine whether the mouse embryo possesses definitive hematopoietic stem cell activity in the analogous AGM region and to determine the order of appearance of stem cells in the yolk sac, AGM region, and liver, we transferred these embryonic tissues into adult irradiated recipients. We report here the long-term, complete, and functional hematopoietic repopulation of primary and serial recipients with AGM-derived cells. We observe potent hematopoietic stem cell activity in the AGM region before the appearance of yolk sac and liver stem cell activity and discuss a model for the maturation of stem cell activity in mouse embryogenesis.