Human adipose or fetal bone marrow. CD146⁺ pericytes from human adipose and fetal bone marrow support human HSCs in vitro. CD146⁺ pericytes that ensheath and nurture blood vessels in adipose and fetal bone marrow are sorted as well as CD146⁻ stromal cells. Sorted cells, as well as unfractionated plastic-adherent mesenchymal stromal cells, from these tissues are cocultured with human cord blood CD34⁺ hematopoietic stem and progenitor cells for 2 weeks, and then transplanted into immunodeficient mice. Only cocultures with CD146⁺ pericytes generate human HSCs capable of reconstituting human hematopoiesis in mice with long-term self-renewal in serial transplantations. The HSC-supportive effect of pericytes is mediated in part by Jagged expressed on pericytes and Notch1 expressed on HSCs as anti-Notch1 antibodies and the γ-secretase inhibitor DAPT block the supportive effect.