Embryonic Stem Cells (ESC) serve as a versatile and infinite source of primitive stem cells of any developmental lineage, made readily available for study or therapeutic application. The hematopoietic lineage in particular may benefit from such a level of accessibility since therapeutic applications from conventional sources of hematopoietic stem cells (HSC) are often limited by the inability to isolate or expand sufficient numbers of cells. However, the potential of alternative ESC-derived generation of HSC has not yet been fulfilled. Our fundamental goal in the work presented in this dissertation was to define and characterize a method for the isolation of transplantable HSC differentiated from ESC. Our initial study was designed to isolate early hematopoietic progenitors based on flow cytometric sorting of cells expressing a lineage-restricted fluorescent transgene. However, incomplete genetic regulation of the transgene at the necessary stage of differentiation precluded its use as a molecular marker of HSC. We then conducted studies in an adult source of HSC (i.e. bone marrow) to further characterize a stem cell enrichment method that separates a population of cells based on efflux of the DNA-binding fluorescent dye Hoechst 33342 (Side Population cells, SP). Our findings demonstrate that within the SP, the exposure of cells to commonly used cell surface marker antibodies can reduce the engraftment of HSC. Returning to our original goal of isolating ESC-derived HSC, we applied the SP sorting method to early stage embryoid bodies (EBs) differentiated from ESC. Our results show that the SP from early EBs contains long-term repopulating hematopoietic stem or progenitor cells, as evidenced by sustained (>16 weeks) lympho-myeloid engraftment of transplanted recipients. Furthermore, we have found that inclusion of a truncated erythropoietin receptor transgene in ESC used to derive the graft can improve the efficiency of transplantation in a ligand-dependent fashion. In summary, we have employed genetic and cell sorting techniques to successfully isolate and expand a population of HSC differentiated from ESC, and these studies may be useful in the design of future therapeutic applications from embryonic stem cells.