Fetal liver is a major site of development of the human immune system. Pre-B and B-lymphocytes are present in the human fetal liver at 12 weeks in a random distribution and increase with gestation. Most fetal liver cells are pre-B but mature B-cells are also present. Functional assays and transplantation experiments indicate that these B-cells are functional and can transfer immunologic memory, albeit imperfectly, in fetal liver reconstituted recipients. T-cell development, in contrast, occurs predominantly in the thymus. Progenitors of T-cells are present in fetal liver and can restore T-cell immunity in irradiated recipients. Human fetal liver contains 1-2% mature T-cells; functional assays are likewise negative. NK cells have been detected in human fetal liver at low frequency. Fetal liver also contains non-T, non-B cells capable of suppressing the development of alloantigen reactive T-cells; these have been termed veto cells. In summary, human fetal liver contains progenitors of several types of lymphoid cells and is an important site of immune development. It also may playa role in the induction of self tolerance during maturation of the immune system. These features of fetal liver may have important implications for the success of fetal liver transplantation in man.