We present cell cycling and functional evidence that the CD34+CD38- immunophenotype can be used to define a rare and primitive subpopulation of progenitor cells in umbilical cord blood. CD34+CD38- cells comprise 0.05% +/- 0.08% of the mononuclear cells present in cord blood. Cell cycle analysis with the fluorescent DNA stain 7- aminoactinomycin D showed that the percentage of CD34+ cells in cycle directly correlated with increasing CD38 expression. CD34+CD38- cord blood cells were enriched for long-term culture-initiating cells (LTCIC; cells able to generate colony-forming unit-cells [CFU-C] after 35 to 60 days of coculture with bone marrow stroma) relative to CD34+CD38- cells. In an extended LTCIC assay, CD34+CD38- cells were able to generate CFU-C between days 60 and 100, clearly distinguishing them from CD34+CD38+ cells that did not generate CFU-C beyond day 40. When plated as single cells, onset of clonal proliferation was markedly delayed in a subpopulation of CD34+CD38- cells; clones (defined as = 100 cells) appeared after 60 days of culture in 2.9% of CD34+CD38- cells. In contrast, 100% of CD34+CD38+ cells formed clones by day 21. Although the CD34+CD38- immunophenotype defines highly primitive populations in both bone marrow and cord blood, important functional differences exist between the two sources. CD34+CD38- cord blood cells have a higher cloning efficiency, proliferate more rapidly in response to cytokine stimulation, and generate approximately sevenfold more progeny than do their counterparts in bone marrow.