Steel factor (SF) increases the frequency of colony formation by CD34+ CD38- cycling cells, but it does not reverse the effect of an autocrine production of transforming growth factor (TGF)-beta 1 by early progenitors of the stem cell compartment. We have used optimal culture conditions supplemented with SF and anti-TGF-beta serum to estimate the proliferative capacity and ability to generate early progenitors in long-term cultures of bone marrow and umbilical cord blood cells. We estimate that the CD34+ CD38- cells from a typical umbilical cord blood sample produce equivalent numbers of granulocyte erythrocyte macrophage megakaryocyte colony-forming units (CFU), twice as many granulocyte-macrophage (GM) CFU, and three times as many erythroid burst-forming units as the same population from an average bone marrow sample used in adult transplantation. These results suggest that umbilical cord blood is a suitable source of cells for adult transplantation.