Muscle tissue of adult mice has been shown to contain stem cells with hematopoietic repopulation ability in vivo. To determine the functional characteristics of stem cells giving rise to this hematopoietic activity, we have performed hematopoietic reconstitution experiments by the use of muscle versus marrow transplantation in lethally irradiated mice and followed the fate of transplanted cells by Y-chimerism using PCR and fluorescence in situ hybridization (FISH) analysis. We report here that transplantation of murine muscle generate a major hematopoietic chimerism at the level of CFU-C, CFU-S, and terminally-differentiated cells in three generations of lethally irradiated mice followed up to 1 year after transplantation. This potential is totally abolished when muscle grafts were performed by the use of muscle from previously irradiated mice. As compared to marrow transplantation, muscle transplants were able to generate similar potencies to give rise to myeloid, T, B, and natural killer (NK) cells. Interestingly, marrow stem cells that have been generated in primary and then in secondary recipients were able to contribute efficiently to myofibers in the muscle tissue of tertiary recipients. Altogether, our data demonstrate that muscle-derived stem cells present a major hematopoietic repopulating ability with evidence of self-replication in vivo. They are radiation-sensitive and similar to marrow-derived stem cells in terms of their ability to generate multilineage hematopoiesis. Finally, our data demonstrate that muscle-derived hematopoietic stem cells do not lose their ability to contribute to myofiber generation after at least two rounds of serial transplantation, suggesting a potential that is probably equivalent to that generated by marrow transplantation.