Most human acute myeloid leukaemia (AML) cells have limited proliferative capacity, suggesting that the leukaemic clone may be maintained by a rare population of stem cells. This putative leukaemic stem cell has not been characterized because the available in vitro assays can only detect progenitors with limited proliferative and replating potential. We have now identified an AML-initiating cell by transplantation into severe combined immune-deficient (SCID) mice. These cells homed to the bone marrow and proliferated extensively in response to in vivo cytokine treatment, resulting in a pattern of dissemination and leukaemic cell morphology similar to that seen in the original patients. Limiting dilution analysis showed that the frequency of these leukaemia-initiating cells in the peripheral blood of AML patients was one engraftment unit in 250,000 cells. We fractionated AML cells on the basis of cell-surface-marker expression and found that the leukaemia-initiating cells that could engraft SCID mice to produce large numbers of colony-forming progenitors were CD34+ CD38-; however, the CD34+ CD38+ and CD34- fractions contained no cells with these properties. This in vivo model replicates many aspects of human AML and defines a new leukaemia-initiating cell which is less mature than colony-forming cells.