Interactions within the hematopoietic niche in the BM microenvironment are essential for maintenance of the stem cell pool. In addition, this niche is thought to serve as a sanctuary site for malignant progenitors during chemotherapy. Therapy resistance induced by interactions with the BM microenvironment is a major drawback in the treatment of hematologic malignancies and bone-metastasizing solid tumors. To date, studying these interactions was hampered by the lack of adequate in vivo models that simulate the human situation. In the present study, we describe a unique human-mouse hybrid model that allows engraftment and outgrowth of normal and malignant hematopoietic progenitors by implementing a technology for generating a human bone environment. Using luciferase gene marking of patient-derived multiple myeloma cells and bioluminescent imaging, we were able to follow pMM cells outgrowth and to visualize the effect of treatment. Therapeutic interventions in this model resulted in equivalent drug responses as observed in the corresponding patients. This novel human-mouse hybrid model creates unprecedented opportunities to investigate species-specific microenvironmental influences on normal and malignant hematopoietic development, and to develop and personalize cancer treatment strategies.