Class I_A phosphatidylinositol-3 kinase (PI-3K) is a lipid kinase, which is activated in blood cells by hematopoietic growth factors. In vitro experiments using chemical inhibitors of PI-3K suggest that this kinase is potentially important for hematopoietic stem and progenitor cell (HSC/P) function, and recent studies identify PI-3K as a therapeutic target in treating different leukemias and lymphomas. However, the role of PI-3K in regulating fetal liver or adult hematopoiesis in vivo is unknown. Therefore, we examined PI-3K-deficient embryos generated by a targeted deletion of the p85α and p85β regulatory subunits of PI-3K (p85α^-/-p85β^+/-). The absolute frequency and number of hematopoietic progenitor cells were reduced in p85α^-/- p85β^+/- fetal livers compared with wild-type (WT) controls. Further, p85α^-/-p85β^+/- fetal liver hematopoietic stem cells (HSCs) had decreased multilineage repopulating ability in vivo compared with WT controls in competitive repopulation assays. Finally, purified p85α^-/-p85β^+/- c-kit⁺ cells had a decrease in proliferation in response to kit ligand (kitL), a growth factor important for controlling HSC function in vivo. Collectively, these data identify PI-3K as an important regulator of HSC function and potential therapeutic target in treating leukemic stem cells.