Hematologic and immunologic functions were examined in 19 HIV-negative infants of HIV-positive mothers and 19 control infants of HIV-negative mothers. Control infants were selected to match for gestational age, weight, and mode of delivery. Cord blood was obtained from all infants and used for flow cytometric determination of lymphocyte subsets, including the naive CD4 count. Furthermore, to determine thymic output, cord blood mononuclear cells were used for determination of T-cell receptor excision circles (TRECs). Evaluation of progenitor cell function was done by means of colony-forming cell assay and fetal thymic organ cultures (FTOCs). Lower naive CD4 counts (459.3 +/- 68.9 vs 1128.9 +/- 146.8 cells/microL, P <.001) and reduced thymic output in infants of HIV-positive mothers were found (frequency of CD4(+) cells with TRECs was 3.6% +/- 0.7% compared with 14.3% +/- 2.2% in controls, P <.001). In combination with lower red blood cell counts in infants of HIV-positive mothers, this finding suggested impairment of progenitor cell function. Indeed, progenitors from infants of HIV-positive mothers had decreased cloning efficiency (15.7% +/- 2.6% vs 55.8% +/- 15.9%, P =.009) and seemed to generate fewer T cells in FTOCs. In conclusion, lower numbers of naive CD4(+) cells and reduced thymic output in HIV-negative infants of HIV-positive mothers may be due to impaired progenitor cell function.