The present invention provides methods for inducing differentiation of a stem cell, such as an embryonic stem cell, into a hematopoietic stem cell, by expressing a cdx gene and/or a hox gene. The method is useful for generating expanded populations of hematopoietic stem cells (HSCs) and thus mature blood cell lineages. This is desirable where a mammal has suffered a decrease in hematopoietic or mature blood cells as a consequence of disease, radiation or chemotherapy