Establishment and maintenance of the blood system relies on self-renewing hematopoietic stem cells (HSCs) that normally reside in small numbers in the bone marrow niche of adult mammals. This Review describes the developmental origins of HSCs and the molecular mechanisms that regulate lineage-specific differentiation. Studies of hematopoiesis provide critical insights of general relevance to other areas of stem cell biology including the role of cellular interactions in development and tissue homeostasis, lineage programming and reprogramming by transcription factors, and stage- and age-specific differences in cellular phenotypes.