Stromal cells are one of the components of the hematopoietic microenvironment, which is crucial for the proliferation and differentiation of hematopoietic cells. We have obtained a bovine fetal-liver stromal cell line that supports erythroid colony formation in the presence of erythropoietin. The cells are cytokeratin-negative and vimentin-positive, indicating a mesenchymal origin. Furthermore, they have phagocytic activity and show endothelial-like morphology. Erythropoietin at a concentration of 2 mU/mL was sufficient to increase erythropoiesis in the presence of these stromal cells, and the effect could be further enhanced in the presence of physiological concentrations of insulin-like growth factor II. The supportive role of stromal cells on erythroid colony formation could still be observed, although to a lesser extent, when the erythroid precursors were physically separated from the stromal monolayer by an agar layer or with serum-free media conditioned by stromal cells. Ultrafiltration of the conditioned media indicated that the active factors have a nominal molecular weight smaller than 3 kD, which does not correspond to any of the known cytokines with erythroid-cell stimulating activities. Our data suggest that these fetal-liver stromal cells play an important role in fetal erythropoiesis, a function which was previously thought to be played exclusively by fetal hepatocytes.