The role of caspase-8 and its adaptor Fas-associated death domain (FADD) in lymphocyte apoptosis is well defined, but their functions in other hemopoietic lineages are not clear. We were unable to generate transgenic mice expressing dominant inhibitors of FADD or caspase-8 in hemopoietic cells, possibly because their expression may have precluded production of vital hemopoietic cells. When using a retroviral gene delivery system, fetal liver stem cells expressing a dominant-negative mutant of FADD (FADD-DN) were unable to generate myeloid or lymphoid cells upon transplantation into lethally irradiated mice. However, fetal liver stem cells expressing very low levels of the caspase-8 inhibitor cytokine response modifier A (CrmA) could reconstitute the hemopoietic system. This level of CrmA expression provided some protection against Fas ligand (FasL)-induced apoptosis and promoted accumulation of myeloid cells in the bone marrow, but it did not inhibit mitogen-induced proliferation of B or T lymphocytes. Using an in vitro colony formation assay, we found that fetal liver stem cells expressing FADD-DN, CrmA, or a dominant-negative mutant of caspase-8 could not proliferate in response to cytokine stimulation. These data demonstrate that the enzymatic activity of caspase-8 and its adaptor FADD are required for cytokine-induced proliferation of hemopoietic progenitor cells.