We report that the chemokine receptor CXCR4 is required for the retention of B lineage and granulocytic precursors within fetal liver and bone marrow microenvironment. In CXCR4-deficient embryos, pro-B cells are present in blood but hardly detectable in liver; myeloid cells are elevated in blood and reduced in liver compared to wild-type embryos. Mice reconstituted with CXCR4-deficient fetal liver cells have reduced donor-derived mature B lymphocytes in blood and lymphoid organs. The numbers of pro-B and pre-B cells are reduced in bone marrow and abnormally high in blood. Granulocytic cells are reduced in bone marrow but elevated and less mature in the blood. B lineage and granulocytic precursors are released into the periphery in absence of CXCR4.