The successful isolation and characterization of human embryonic stem cells (hESCs) provides a powerful tool to study the cellular and genetic mechanisms that mediate cell-fate decisions toward distinct developmental lineages. hESC-derived cells may also be suitable for novel cellular therapies. Significant progress in hematopoietic development of hESCs has demonstrated production of many types of blood cells from hESCs including myeloid, erythroid and lymphoid lineage cells, and possibly hematopoietic stem cells. Current established approaches to generate specific hematopoietic lineages are based on the initial pre-differentiation of hESCs into a heterogeneous mixture of cell populations. In this chapter, we describe two methods that have been successfully used in our laboratory: (1) co-culture with stromal cells derived from hematopoietic microenvironments and (2) x embryoid body (EB) formation. Subsequent to this early differentiation step, distinct progenitor cell populations can be derived, sorted, and utilized for further lineage-specific developmental studies.