The cadherins, an important family of cell adhesion molecules, are known to play major roles during embryonic development and in the maintenance of solid tissue architecture. In the hematopoietic system, however, little is known of the role of this cell adhesion family. By RT-PCR, western blot analysis and immunofluorescence staining we show that N-cadherin, a classical type I cadherin mainly expressed on neuronal, endothelial and muscle cells, is expressed on the cell surface of resident bone marrow stromal cells. FACS analysis of bone marrow mononuclear cells revealed that N-cadherin is also expressed on a subpopulation of early hematopoietic progenitor cells. Triple-color FACS analysis defined a new CD34(+) CD19(+) N-cadherin(+) progenitor cell population. During further differentiation, however, N-cadherin expression is lost. Treatment of CD34(+) progenitor cells with function-perturbing N-cadherin antibodies drastically diminished colony formation, indicating a direct involvement of N-cadherin in the differentiation program of early hematopoietic progenitors. N-cadherin can also mediate adhesive interactions within the bone marrow as demonstrated by inhibition of homotypic interactions of bone-marrow-derived cells with N-cadherin antibodies. Together, these data strongly suggest that N-cadherin is involved in the development and retention of early hematopoietic progenitors within the bone marrow microenvironment.