Haemopoietic stem cells are present in fetal blood but their levels decline rapidly in the peripheral circulation of the infant after birth. We previously reported a case of stem cell transplant in a beta-thalassaemia boy using a combination of the cord blood (CB) and neonatal blood (NB) of his sister. This transplant resulted in a successful engraftment, To investigate the possibility of using NE to supplement CB for related transplants, we further characterized stem and progenitor cells and lymphocyte subsets in 20 NE samples, comparing the findings with those in 20 CB samples. Our data showed that NB contained substantial levels of CD34(+) cells, CD34(+)CD38(-) cells, colony-forming units-granulocyte macrophage (CFU-GM), colony forming units-erythroid (CFU-E), burst forming units-erythroid (BFU-E) and longterm culture initiating cells (LTCIC). NE was similar to CB in the levels of T lymphocytes, but the amounts of B lymphocytes and natural killer cells were higher in CB (P = 0.033, P = 0.001, respectively). The kinetics of CD34(+) cells in NB was investigated in serial blood samples obtained from 10 full-term infants at 2, 4, 6, 8, 24 and 48 h after birth. CD34(+) cells decreased rapidly after birth, declining to only 30% of the 2 h level at 48 h (P < 0.012). The rate of decline was greatest in the first 4h of life. NE from four infants was expanded by culturing the blood samples in the presence of thrombopoietin (Tpo), interleukin 1 beta (IL-1 beta), IL-3, IL-6, flt-3 ligand and stem cell factor (SCF) for 7 d. This resulted in the increase of CD34(+) cells, CFU-GM and CFU-MK by 271 +/- 179, 556 +/- 385 and 113 +/- 75 fold respectively Three of the Eve samples expanded for 7 d contained LTCIC. These findings suggest that NB might be a supplementary or alternative source of stem cells to CB for transplant. The ethics and practicality of this approach deserve further exploration.