CD137 is a member of the tumor necrosis factor receptor family and is involved in the regulation of activation, proliferation, differentiation, and cell death of leukocytes. Bidirectional signaling exists for the CD137 receptor/ligand system, as CD137 ligand, which is expressed as a transmembrane protein, can also transduce signals into the cells on which it is expressed. In this study, we have identified expression of CD137 in human bone marrow and expression of CD137 ligand on a subset of CD34+ cells. Cross-linking of CD137 ligand on CD34+ cells by CD137 ligand agonists induces activation, prolongation of survival, proliferation, and colony formation. CD137 ligand agonists induce differentiation of early hematopoietic progenitor cells to colony-forming units-granulocyte/macrophage and subsequently to monocytes and macrophages but not to dendritic cells. These data uncover a novel function of CD137 and CD137 ligand by showing their participation in the growth and differentiation of hematopoietic progenitor cells.