Abstract: The present invention is directed to mammalian yolk sac stem cells. In particular, it relates to the characterization, culturing, long-term expansion and uses of yolk sac stem cells for in vivo reconstitution and therapy. Yolk sac stem cells isolated from the early embryonic yolk sac prior to blood island formation exhibit a homogeneous morphology and a primitive cell surface phenotype without the expression of mature leukocyte markers and major histocompatibility complex-encoded antigens. The cells can be cultured and expanded long-term with minimal differentiation, and without alteration of their pluripotency. However, such cells can be induced to express various blood cell markers upon stimulation with specific cytokines. In addition, the cells also express certain endothelial cell markers and growth characteristics. Such yolk sac cells may be particularly effective in the reconstitution of a lymphohematopoietic system, as they are capable of forming both endothelial cells and blood cells.