Umbilical cord blood has been increasingly used as a source of hematopoietic stem cells. A major area of concern for the use of cord blood transplantation is the delay in myeloid and lymphoid recovery. To directly compare myeloid and lymphoid recovery using an animal model of bone marrow and cord blood as sources of stem cells, hematopoietic engraftment and immune recovery were studied following infusion of T-cell-depleted adult bone marrow or full-term fetal blood cells, as a model of cord blood in a murine allogeneic transplantation model (C57BL/6 [H-2(b)] --> BALB/c [H-2(d)]). Allogeneic full-term fetal blood has poorer radioprotective capacity but greater long-term engraftment potential on a cell-to-cell basis compared with T-cell-depleted bone marrow. Allogeneic full-term fetal blood recipients had decreased absolute numbers of T, B, and dendritic cells compared with bone marrow recipients. Splenic T cells in allogeneic full-term fetal blood recipients proliferated poorly, were unable to generate cytotoxic effectors against third-party alloantigens in vitro, and failed to generate alloantigen-specific cytotoxic antibodies in vivo. In addition, reconstituting T cells in fetal blood recipients had decreased mouse T-cell receptor delta single-joint excision circles compared with bone marrow recipients. At a per-cell level, B cells from fetal blood recipients did not proliferate as well as those found in bone marrow recipients. These results suggest that full-term fetal blood can engraft allogeneic hosts across the major histocompatibility barrier with slower hematopoietic engraftment and impaired immune reconstitution.