Multiple myeloma is a hematological neoplasm characterized by the accumulation of clonal plasma cells in the bone marrow. Its frequent relapse following achievement of clinical remissions implicates the existence of therapy-resistant myeloma-initiating cells. To date, results on the identity of myeloma-initiating cells have differed. Here, we prospectively identified a myeloma-initiating population by fractionating and transplanting patient bone marrow cells into human bone-bearing immunocompromised mice. Xenotransplantation of fractionated CD138+/CD38 high cells from 40% of patients (8/20) led to a repopulation of CD19+ CD38 low or CD138+ CD38+ B-lineage cells in human bone grafts; and these grafts were clonally derived from patient myeloma cells. Meanwhile, CD19+ CD38 low xenografts were detected in human bone-bearing mice transplanted with CD19+ CD38 low/− B cells from 8 of 22 samples but were not clonally related to patient myeloma cells. Further fractionation and xenotransplantation of CD138+ CD38 high cells demonstrated that (CD45 low/− or CD19−) CD38 high/CD138+ plasma cells, but not (CD45 high or CD19+) CD38 high/CD138+ plasmablasts enrich for myeloma-initiating cells. Quantitative reverse transcription-PCR of two serially transplantable xenografts, which were CD19− CD138+, revealed that they were Pax5 (a B-cell-specific transactivator)-negative. These results suggest that CD19− CD45 low/− fully differentiated plasma cells enrich for long-lived and tumor-initiating cells whereas B cells or plasmablasts do not.