We have recently discovered a unique CD34(lo)CD133(lo) cell population in the human fetal liver (FL) that gives rise to cells in the hepatic lineage. In this study, we further characterized the biological functions of FL CD34(lo)CD133(lo) cells. Our findings show that these CD34(lo)CD133(lo) cells express markers of both endodermal and mesodermal lineages and have the capability to differentiate into hepatocyte and mesenchymal lineage cells by ex vivo differentiation assays. Furthermore, we show that CD34(lo)CD133(lo) cells express growth factors that are important for human hematopoietic stem cell (HSC) expansion: stem cell factor (SCF), insulin-like growth factor 2 (IGF2), C-X-C motif chemokine 12 (CXCL12), and factors in the angiopoietin-like protein family. Co-culture of autologous FL HSCs and allogenic HSCs derived from cord blood with CD34(lo)CD133(lo) cells supports and expands both types of HSCs.These findings are not only essential for extending our understanding of the HSC niche during the development of embryonic and fetal hematopoiesis but will also potentially benefit adult stem cell transplantations in clinics because expanded HSCs demonstrate the same capacity as primary cells to reconstitute the human immune system and mediate long-term hematopoiesis in vivo. Together, CD34(lo)CD133(lo) cells not only serve as stem/progenitor cells for liver development but are also an essential component of the HSC niche in the human FL.