Hematopoietic stem cells (HSCs) undergo dramatic expansion during fetal liver development, but attempts to expand their numbers ex vivo have failed. We hypothesized that unidentified fetal liver cells produce growth factors that support HSC proliferation. Here we describe a novel population of CD3+ and Ter119- day-15 fetal liver cells that support HSC expansion in culture, as determined by limiting dilution mouse reconstitution analyses. DNA array experiments showed that, among other proteins, insulin-like growth factor 2 (IGF-2) is specifically expressed in fetal liver CD3+ cells but not in several cells that do not support HSCs. Treatment of fetal liver CD3+Ter119- cells with anti-IGF-2 abrogated their HSC supportive activity, suggesting that IGF-2 is the key molecule produced by these cells that stimulates HSC expansion. All mouse fetal liver and adult bone marrow HSCs express receptors for IGF-2. Indeed, when combined with other growth factors, IGF-2 supports a 2-fold expansion of day-15 fetal liver Lin-Sca-1+c-Kit+ long-term (LT)-HSC numbers. Thus, fetal liver CD3+Ter119- cells are a novel stromal population that is capable of supporting HSC expansion, and IGF-2, produced by these cells, is an important growth factor for fetal liver and, as we show, adult bone marrow HSCs.