We recently reported that human bone marrow hematopoietic CD34(+) progenitors express functional Toll-like receptors (TLR) and can differentiate into myeloid cells just by stimulation with resiquimod (R848), a specific agonist for TLR7/8. However, the mechanisms by which R848 induces cell differentiation, the effects of other TLR agonists and the functionality of the differentiated cells are not known. Comparable to R848, loxoribine (a TLR7 agonist) and Pam(3)CSK(4) (a TLR2 agonist) induced cytokine production and cell differentiation along the myeloid lineage. R848 and loxoribine were more effective than Pam(3)CSK(4) at inducing the lineage-negative (CD11c(+) CD14(-)) dendritic cells (DC), whereas Pam(3)CSK(4) was more effective at inducing CD11c(+) CD14(+) monocytes. Both cell subsets expressed CD80/CD86 and HLA-DR molecules; however, they showed differential expression of CD1a, CD1b, CD1c, CD11b, CD206 and CD207 markers when compared with each other. Cell differentiation into DC was significantly inhibited by an anti-TNF-alpha nonoclonal antibody. The CD11c(+) CD14(-) subset was isolated and shown to be more potent in stimulating an alloreaction than the CD11c(+) CD14(+) subset. Collectively, these data highlight the differential effects of TLR agonists on human bone marow CD34(+) progenitor cells and provide a new opportunity for generating functional DC that would be useful in cancer vaccination.