We exploited the ability to transduce fetal liver hematopoietic stem/progenitor cells in situ with recombinant retrovirus, together with the ability to analyze proviral integration patterns into chromosomal DNA, to detect the cellular and organ fate of hematopoietic stem and progenitor-derived progeny in tissues and in the circulation of neonatal and adult rats. Two hundred seventeen fetuses were injected with retrovirus supernatant on day 16 of gestation, before the development of the bone marrow cavity. The progeny of 41 stem and progenitor cells from 97 liveborn rats were clonally identified. Pluripotent and lineage-restricted stem/progenitor clones derived from the fetal liver consistently gave rise to progeny in the marrow of newborn and adult rats. Patterns of differentiation of transduced stem and progenitor cells fell into distinct subsets. Blood cells derived from in situ transduced cells that originated in the fetal liver circulated throughout the life span of the adult animals. These data provide molecular evidence of the origin of medullary cavity hematopoiesis by cells derived from the fetal liver that were transduced in vivo, homed to the developing medullary cavity and proliferated in a normal medullary hematopoietic microenvironment.