We previously developed a system using murine strome (HESS-5), which could expand umbilical cord blood (UCB) stem and progenitor cells, especially CD34+/38- cells, in the presence of human recombinant cytokines. In this study, the ability of expanded UCB- or bone marrow (BM)-CD34+ cells to differentiate into dendritic cells (DCs) was examined. DCs could be induced either from short or long term cultured CD34+ cells after switching the cytokines from Flk-2/Flt-3 ligand, stem cell factor (SCF), thrombopoietin (TPO) to granulocyte-macrophage colony stimulating factor (GM-CSF) and interleukin-4 (IL-4) (immature type) plus tumor necrosis factor (TNF)-alpha with stimulation by CD40L transfectant (mature type). Each immature or mature UCB-DCs showed a dextran uptake or a potent allo-T lymphocytes proliferative ability, respectively. Furthermore, those DCs from BM significantly stimulated auto-T lymphocytes in an antigen (varicella zoster virus) specific manner. In conclusion, a novel culture system using HESS-5 is useful to support a rapid and sustained generation of primitive myeloid cells which can develop into functional DCs.