RAG1/GFP knock-in mice were used to precisely chart the emergence and expansion of cells that give rise to the immune system. Lymphopoietic cells detectable in stromal co-cultures arose as early as E8.5, i.e. prior to establishment of the circulation within the paraaortic splanchnopleura (P-Sp). These cells were Tie2+ RAG1- CD34(Lo/-) Kit+ CD41-. While yolk sac (YS) also contained lymphopoietic cells after E9.5, CD41+ YS cells from < or =25-somite embryos produced myelo-erythroid cells but no lymphocytes. Notch receptor signaling directed P-Sp cells to T lymphocytes but did not confer lymphopoietic potential on YS cells. Thus, definitive hematopoiesis arises in at least two independent sites that differ in lymphopoietic potential. Expression of RAG1, the earliest known lymphoid event, first occurred around E10.5 within the embryos. RAG1/GFP+ cells appeared in the liver at E11.0 and progenitors with B and/or T lineage potential were enumerated at subsequent developmental stages.