In vitro differentiated embryonic stem (ES) cells contain a population which is similar to fetal liver pro/pre-B cells on the basis of cell surface antigens and cytoplasmic expression of immunoglobin heavy chain. This population was purified and transplanted into Rag-1 deficient recipients to characterize its developmental potential in vivo. Following intravenous transfer, these cells rapidly reconstituted the splenic B but not the T cell compartment. Reconstitution was transient, indicating the lack of long-term reconstituting capacity. Similar to fetal liver, B-1 type as well as conventional B cells were generated, accompanied by high serum IgM levels. Intraperitoneal injection generated high numbers of peritoneal B cells, predominately of the B-1a phenotype, with poor splenic repopulation and low serum IgM levels. These observations suggest the emergence of two different B lineage precursor populations during in vitro ES cell differentiation and define a possible role of the microenvironment in directing lymphoid development.