A HLA-DR1 transgenic mouse (NOD/scid-DR1) was derived by breeding the existing B10.M/J-[Tg]DR1 mouse with the NOD/scid mouse. The intention was to enhance engraftment of human T cells by providing human class II elements in the tissues. Thymus and spleen fragments from adult NOD/scid-DR1 mice were transplanted under the syngeneic kidney capsules, followed by injection of human cord blood mononuclear cells (CBMNC) into transplanted tissues. FACS analyses showed that human T and B cells were consistently detected in the peripheral blood and spleen, of the chimeric mice. An average of 20% of human cells was found in the spleen and the engrafted thymus/spleen tissues. Furthermore, human cells from these tissues could proliferate with anti-human CD3 antibody and these mice could generate humoral and cellular responses to allogeneic human cells. Cytokines, such as IL-10, GMCSF, IFN-gamma, and TNF-alpha were also detected in the supernatants of the cultured human cells from the chimeric mice, when they were stimulated with allogeneic cells. Therefore, a novel mouse model with functional circulating human T and B cells was established that would facilitate the exploration of vaccine, the disease processes of autoimmunity, HIV infection, and human cancer.