Adult-type lympho-myeloid hematopoietic progenitors are first generated in the aorta-gonad-mesonephros region between days 27 and 40 of human embryonic development, but an elusive blood forming potential is present earlier in the underlying splanchnopleura. In the present study, we show that angiotensin-converting enzyme (ACE, also known as CD143), a recently identified cell-surface marker of adult human hematopoietic stem cells, is already expressed in all presumptive and developing blood-forming tissues of the human embryo and fetus: para-aortic splanchnopleura, yolk sac, aorta-gonad-mesonephros, liver, and bone marrow (BM). Fetal liver and BM-derived CD34(+)ACE(+) cells, but not CD34(+)ACE(-) cells, are endowed with long-term culture-initiating cell potential and sustain multilineage hematopoietic cell engraftment when transplanted into NOD/SCID mice. Furthermore, from 23-26 days of development, ACE expression characterizes rare CD34(-)CD45(-) cells concentrated in the hemogenic portion of the para-aortic splanchnopleura. ACE(+) cells sorted from the splanchnopleura generated colonies of hematopoietic cells more than 40 times more frequently than ACE(-) cells. These data suggest that, in addition to being a marker of adult human hematopoietic stem cells, ACE identifies embryonic mesodermal precursors responsible for definitive hematopoiesis, and we propose that this enzyme is involved in the regulation of human blood formation.