Stem cell localization, conservation, and differentiation is believed to occur in niches in the marrow stromal microenvironment. Our recent observation that long-term in vitro human hematopoiesis requires a stromal heparan sulfate proteoglycan (HSPG) led us to hypothesize that such HSPG may orchestrate the formation of the stem cell niche. We compared the structure and function of HS from M2-10B4, a hematopoiesis-supportive cell line, with HS from a nonsupportive cell line, FHS-173-We. Long-term culture-initiating cell (LTC-IC) maintenance was enhanced by PG from supportive cells but not by PG from nonsupportive cells (P <.005). The supportive HS were significantly larger and more highly sulfated than the nonsupportive HS. Specifically, supportive HS contained higher 6-O-sulfation on the glucosamine residues. In agreement with these observations, purified 6-O-sulfated heparin and highly 6-O-sulfated bovine kidney HS similarly maintained LTC-IC. In contrast, completely desulfated heparin, N-sulfated heparin, and unmodified heparin did not support LTC-IC maintenance. Moreover, the supportive HS promoted LTC-IC maintenance but not differentiation of CD34(+)/HLA-DR- cells into colony-forming cells (CFCs) and mature blood cells. The supportive HS but not the nonsupportive HS bound both cytokines and matrix components critical for hematopoiesis, including interleukin-3 (IL-3), macrophage inflammatory protein-1 (MIP-1), and thrombospondin (TSP). Significantly more CD34(+) cells adhered directly to immobilized O-sulfated heparin than to N-sulfated or desulfated heparin. Thus, hematopoiesis-supportive stromal HSPG possessing large, highly 6-O-sulfated HS mediate the juxtaposition of hematopoietic progenitors with stromal cells, specific growth-promoting (IL-3) and growth-inhibitory (MIP-1 and platelet factor 4 [PF4]) cytokines, and extracellular matrix (ECM) proteins such as TSP. We conclude that the structural specificity of stromal HSPG that determines the selective colocalization of cytokines and ECM components leads to the formation of discrete niches, thereby orchestrating the controlled growth and differentiation of stem cells. These findings may have important implications for ex vivo expansion of and gene transfer into primitive hematopoietic progenitors.