Our goal was to define a clinically significant population of cells by utilizing a single-step selection process to enrich hematopoietic cells capable of regenerating the retinal pigment epithelium (RPE). Utilizing intravitreal injection of bone marrow cells from a mouse with pigment (C57BL6:gfp) into albino recipient mice (C57BL6:Tyr(-)), we show that hematopoietic progenitor cells (HPCs) enriched for CD133 can regenerate RPE cells and improve retinal function. The chemokine CXCL12 (stromal cell-derived factor 1alpha) is essential for migration, incorporation, and RPE regeneration by CD133(+) HPCs. Once incorporated, CD133(+) HPCs become pigmented, adopt an RPE morphology, and express RPE-specific proteins, leading to partial functional recovery by electroretinogram. Human CD133(+) HPCs also incorporate in the retina and assume RPE morphology in nonobese diabetic/severe combined immunodeficient mice xenografts. These data show that a clinically accessible CD133(+) hematopoietic cell can home to an injured RPE layer, differentiate into cells with significant RPE morphology, and provide therapeutic functional recovery of the visual cycle.