The development of plasmacytoid dendritic cells (pDC2) from human CD34(+) stem cells in vivo was studied in RAG-2(-/-) interleukin (IL)-2Rgamma(-/-) mice that lack functional T and B cells and natural killer cells. CD34(+) cells isolated from fetal liver or thymus were labeled with 5- and 6-carboxyfluorescein diacetate succinimidyl ester (CFSE) and were injected into a human thymus grafted subcutaneously in the RAG-2(-/-) IL-2Rgamma(-/-) mice. One to 4 weeks later the CFSE label was found not only in T cells but also in CD123(+/high) CD4(+)CD45RA(+) pDC2, indicating that the CD34(+) cells can develop into pDC2 within a thymus. In addition to pDC2, CFSE-labeled dendritic cells with a mature phenotype, determined by the cell surface markers CD11c, CD83, and CD80, were found in the injected human thymus graft. pDC2 was not found in the periphery of mice carrying a human thymic graft, indicating that the intrathymic pDC2 failed to emigrate from the thymus. We also demonstrate that pDC2 can develop outside the thymus because relatively high percentages of pDC2 were found in the periphery after the intravenous injection of CD34(+)CD38(-) fetal liver cells in RAG-2(-/-) IL-2Rgamma(-/-) mice without a human thymus graft. These data indicate that the thymus and the peripheral pDC2 develop independently of each other.