Isolated and expanded scl (+) adult murine progenitors show a strong endothelial and hematopoietic differentiation potential and have been considered to be the adult equivalent of the hemangioblast. These unique cells may provide effective therapeutic approaches to tissue damage resulting from hypoxemia or chronic ischemia. Here, we study the fate of adult scl (+/+) during development and their ability to reverse genetic defects in scl expression. scl (+/+) adult stem cells (clone RM26) did not persist during embryonic development after injection into blastocysts of allogeneic wild-type mice on day E 3.5. However, GFP(+)-marked scl (+/+) cells were detected in all possible genotypes from allogeneic scl (+/+) intercrosses (scl (+/+), scl (+/-), scl (-/-) on day E 9.5 after the cloned cells were injected into scl-mutant blastocysts on day E 3.5. Nevertheless, there was no indication of phenotypic rescue of the mutant blastocysts despite the continued presence of scl (+/+) RM26 cells in the allogeneic embryonic environment. The results show that differentiated stem cells providing a defective gene may exert effects during development when there is a reparative demand, but they are not capable of reversing the effects of a mutant phenotype during embryonic development. These effects should be considered when evaluating the efficacy of stem cells for therapeutic reversal of inborn errors of development.