Murine embryonic stem cells (mESC) readily form embryoid bodies (EBs) that exhibit hematopoietic differentiation. Methods based on EB formation or ESC coculture with murine bone marrow stromal cell lines have revealed pathways of both primitive and definitive hematopoietic differentiation progressing from primitive mesoderm via hemangioblasts to endothelium and hematopoietic stem and progenitor cells. The addition of specific hematopoietic growth factors and morphogens to these cultures enhances the generation of neutrophils, macrophages, megakaryocyte/platelets, and hemoglobinized mature red cells. In addition, selective culture systems have been developed to support differentiation into mature T lymphocytes, natural killer cells, B cells, and dendritic cells. In most cases, culture systems have been developed that support equivalent differentiation of various human ESC (hESC). The major obstacle to translation of ESC hematopoietic cultures to clinical relevance has been the general inability to produce hematopoietic stem cells (HSC) that can engraft adult, irradiated recipients. In this context, the pattern of ES hematopoietic development mirrors the yolk sac phase of hematopoiesis that precedes the appearance of engraftable HSC in the aorta-gonad-mesonephros region. Genetic manipulation of mESC hematopoietic progeny by upregulation of HOXB4 or STAT5 has led to greatly enhanced long- or short-term multilineage hematopoietic engraftment, suggesting that genetic or epigenetic manipulation of these pathways may lead to functional HSC generation from hESC.