Twist-1 encodes a basic helix-loop-helix transcription factor, known to contribute to mesodermal and skeletal tissue development. We have reported previously that Twist-1 maintains multipotent human bone marrow-derived mesenchymal stem/stromal cells (BMSC) in an immature state, enhances their life-span, and influences cell fate determination. In this study, human BMSC engineered to express high levels of Twist-1 were found to express elevated levels of the chemokine, CXCL12. Analysis of the CXCL12 proximal promoter using chromatin immunoprecipitation analysis identified several E-box DNA sites bound by Twist-1. Functional studies using a luciferase reporter construct showed that Twist-1 increased CXCL12 promoter activity in a dose dependent manner. Notably, Twist-1 over-expressing BMSC exhibited an enhanced capacity to maintain human CD34 + hematopoietic stem cells (HSC) in long-term culture-initiating cell (LTC-IC) assays. Moreover, the observed increase in HSC maintenance by Twist-1 over-expressing BMSC was blocked in the presence of the CXCL12 inhibitor, AMD3100. Supportive studies, using Twist-1 deficient heterozygous mice demonstrated a significant decrease in the frequency of stromal progenitors and increased numbers of osteoblasts within the bone. These observations correlated to a decreased incidence in the number of clonogenic stromal progenitors (colony forming unit–fibroblasts) and lower levels of CXCL12 in Twist-1 mutant mice. Furthermore, Twist-1 deficient murine stromal feeder layers, exhibited a significant decrease in CXCL12 levels and lower numbers of hematopoietic colonies in LTC-IC assays, compared with wild type controls. These findings demonstrate that Twist-1, which maintains BMSC at an immature state, endows them with an increased capacity for supporting hematopoiesis via direct activation of CXCL12 gene expression.