Mesenchymal stem cells (MSCs) have great clinical potential for the replacement and regeneration of diseased or damaged tissue. They are especially important in the production of the hematopoietic microenvironment, which regulates the maintenance and differentiation of hematopoietic stem cells (HSCs). In the adult, MSCs and their differentiating progeny are found predominantly in the bone marrow (BM). However, it is as yet unknown in which embryonic tissues MSCs reside and whether there is a localized association of these cells within hematopoietic sites during development. To investigate the embryonic origins of these cells, we performed anatomical mapping and frequency analysis of mesenchymal progenitors at several stages of mouse ontogeny. We report here the presence of mesenchymal progenitors, with the potential to differentiate into cells of the osteogenic, adipogenic and chondrogenic lineages, in most of the sites harboring hematopoietic cells. They first appear in the aorta-gonad-mesonephros (AGM) region at the time of HSC emergence. However, at this developmental stage, their presence is independent of HSC activity. They increase numerically during development to a plateau level found in adult BM. Additionally, mesenchymal progenitors are found in the embryonic circulation. Taken together, these data show a co-localization of mesenchymal progenitor/stem cells to the major hematopoietic territories, suggesting that, as development proceeds, mesenchymal progenitors expand within these potent hematopoietic sites.