The yolk sac is accepted as the lone site of primitive hematopoiesis. The role of the yolk sac (YS) in generating definitive hematopoietic progenitors, however, has remained controversial as they are detected coincident with the initiation of the first heartbeat. The Ncx1-/- embryo fails to initiate a heartbeat and yet continues to develop for nearly 48 hours. To assure that the lack of circulation had no direct effect on hematopoiesis, we conducted LacZ staining, RT-PCR, annexin V apoptosis analysis, cell counting, zeta-globin in-situ hybridization, and benzidine staining. We have determined that the Ncx1-/- embryo is an appropriate model for the analysis of the temporal and spatial distribution of hematopoietic progenitor cells in an embryonic environment lacking circulation. Few or no hematopoietic progenitors are found in the Ncx1-/- PSp as late as E10, resulting in a 103-fold enrichment of progenitors in the Ncx1 -/- YS. We conclude that the PSp does not appear to function as a site of active hematopoiesis prior to E10. Furthermore, our findings support a model in which large numbers of definitive hematopoietic progenitors and primitive erythroblasts are generated in the YS between E8.0 and E10 and enter the embryo proper to seed the liver at the onset of embryonic circulation. The study of hematopoietic development in the Ncx1 -/- embryo was further expanded to examine placental hematopoiesis, fetal liver organ culture, colony forming units---spleen, as well as early lymphoid development. The results of these studies suggest that the placenta produces cells with hematopoietic potential de novo in the absence of systemic circulation, that embryonic hematopoietic progenitors can be expanded in hanging drop co-culture with fetal liver cells, that a quantification of CFU-S from Ncx1-/- embryos is possible with sufficient resources, and that there is evidence for the de novo emergence of a B lymphoid population in the YS.