The hematopoietic system develops during embryogenesis at temporally and anatomically restricted sites. The anatomical origin of definitive HSCs is not fully resolved, and little is known about how the different fetal hematopoietic microenvironments direct HSC development. Here, we show that the mouse placenta functions as a hematopoietic organ that harbors a large pool of pluripotent HSCs during midgestation. The onset of HSC activity in the placenta parallels that of the AGM (aorta-gonad-mesonephros) region starting at E10.5-E11.0. However, the placental HSC pool expands until E12.5-E13.5 and contains >15-fold more HSCs than the AGM. The expansion of the CD34(+)c-kit(+) HSC pool in the placenta occurs prior to and during the initial expansion of HSCs in the fetal liver. Importantly, the placental HSC pool is not explained by rare circulating HSCs, which appear later. These data support an important, but unappreciated, role for the placenta in establishing the mammalian definitive hematopoietic system.