The study of megakaryocytopoiesis has been based largely on in vitro assays. We characterize an in vivo model of megakaryocyte and platelet development in which human peripheral blood stem cells (PBSCs) differentiate along megakaryocytic as well as myeloid/lymphoid lineages in sublethally irradiated nonobese diabetic/severe combined immunodeficient (NOD-SCID) mice. Human hematopoiesis preferentially occurs in the bone marrow of the murine recipients, and engraftment is independent of exogenous cytokines. Human colony-forming units-megakaryocyte (CFU-MK) develop predominantly in the bone marrow, and their presence correlates with the overall degree of human cell engraftment. Using a sensitive and specific flow cytometric assay, human platelets are detected in the peripheral blood from weeks 1 to 8 after transplantation. The number of circulating human platelets peaks at week 3 with a mean of 20 x 10(9)/L. These human platelets are functional as assessed by CD62P expression in response to thrombin stimulation in vitro. Exogenous cytokines have a detrimental effect on CFU-MK production after 2 weeks, and animals treated with these cytokines have no circulating platelets 8 weeks after transplantation. Although cytokine stimulation of human PBSCs ex vivo led to a significant increase in CFU-MK, CD34+/41+, and CD41+ cells, these ex vivo expanded cells provided only delayed and transient platelet production in vivo, and no CFU-MK developed in vivo after transplantation. In conclusion, xenogeneic transplantation of human PBSCs into NOD/SCID mice provides an excellent in vivo model to study human megakaryocytopoiesis and platelet production.