To better characterize human dendritic cells (DCs) that originate from lymphoid progenitors, the authors examined the DC differentiation pathways from a novel CD7(+)CD45RA(+) progenitor population found among cord blood CD34(+) cells. Unlike CD7(-)CD45RA(+) and CD7(+)CD45RA(-) progenitors, this population displayed high natural killer (NK) cell differentiation capacity when cultured with stem cell factor (SCF), interleukin (IL)-2, IL-7, and IL-15, attesting to its lymphoid potential. In cultures with SCF, Flt3 ligand (FL), granulocyte-macrophage colony-stimulating factor (GM-CSF), and tumor necrosis factor (TNF)-alpha (standard condition), CD7(+)CD45RA(+) progenitors expanded less (37- vs 155-fold) but yielded 2-fold higher CD1a(+) DC percentages than CD7(-)CD45RA(+) or CD7(+)CD45RA(-) progenitors. As reported for CD34(+)CD1a(-) thymocytes, cloning experiments demonstrated that CD7(+)CD45RA(+) cells comprised bipotent NK/DC progenitors. DCs differentiated from CD7(-)CD45RA(+) and CD7(+)CD45RA(+) progenitors differed as to E-cadherin CD123, CD116, and CD127 expression, but none of these was really discriminant. Only CD7(+)CD45RA(+) or thymic progenitors differentiated into Lag(+)S100(+) Langerhans cells in the absence of exogenous transforming growth factor (TGF)-beta 1. Analysis of the DC differentiation pathways showed that CD7(+)CD45RA(+) progenitors generated CD1a(+)CD14(-) precursors that were macrophage-colony stimulating factor (M-CSF) resistant and CD1a(-)CD14(+) precursors that readily differentiated into DCs under the standard condition. Accordingly, CD7(+)CD45RA(+) progenitor-derived mature DCs produced 2- to 4-fold more IL-6, IL-12, and TNF-alpha on CD40 ligation and elicited 3- to 6-fold higher allogeneic T-lymphocyte reactivity than CD7(-)CD45RA(+) progenitor-derived DCs. Altogether, these findings provide evidence that the DCs that differentiate from cord blood CD34(+)CD7(+)CD45RA(+) progenitors represent an original population for their developmental pathways and function. (Blood. 2000;96:3748-3756)