The steroid and xenobiotic receptor (SXR) (also known as pregnane X receptor or PXR) is a broad-specificity nuclear hormone receptor that is well known for its role in drug and xenobiotic metabolism. SXR is activated by a wide variety of endobiotics, dietary compounds, pharmaceuticals, and xenobiotic chemicals. SXR is expressed at its highest levels in the liver and intestine yet is found in lower levels in other tissues, where its roles are less understood. We previously demonstrated that SXR(-/-) mice demonstrate elevated nuclear factor (NF)-κB activity and overexpression of NF-κB target genes and that SXR(-/-) mice develop lymphoma derived from B-1 lymphocytes in an age-dependent manner. In this work, we show that fetal livers in SXR(-/-) mice display elevated expression of NF-κB target genes and possess a significantly larger percentage of B-1 progenitor cells in the fetal liver. Furthermore, in utero activation of SXR in wild-type mice reduces the B-1 progenitor populations in the embryonic liver and reduces the size of the B-1 cell compartment in adult animals that were treated in utero. This suggests that activation of SXR during development may permanently alter the immune system of animals exposed in utero, demonstrating a novel role for SXR in the generation of B-1 cell precursors in the fetal liver. These data support our previous findings that SXR functions as a tumor suppressor in B-1 lymphocytes and establish a unique role for SXR as a modulator of developmental hematopoiesis in the liver.