In recent years, advances in the humanized mouse system have led to significantly increased levels of human hematopoietic stem cell (HSC) engraftment. The remaining limitations in human HSC engraftment and function include lymphoid-skewed differentiation and inefficient myeloid development in the recipients. Limited human HSC function may partially be attributed to the inability of the host mouse microenvironment to provide sufficient support to human hematopoiesis. To address this problem, we created membrane-bound human stem cell factor (SCF)/KIT ligand (KL)–expressing NOD/SCID/IL2rgKO (hSCF Tg NSG) mice. hSCF Tg NSG recipients of human HSCs showed higher levels of both human CD45⁺ cell engraftment and human CD45⁺CD33⁺ myeloid development compared with NSG recipients. Expression of hSCF/hKL accelerated the differentiation of the human granulocyte lineage cells in the recipient bone marrow. Human mast cells were identified in bone marrow, spleen, and gastrointestinal tissues of the hSCF Tg NSG recipients. This novel in vivo humanized mouse model demonstrates the essential role of membrane-bound hSCF in human myeloid development. Moreover, the hSCF Tg NSG humanized recipients may facilitate investigation of in vivo differentiation, migration, function, and pathology of human mast cells.