Previously, we described AGM-derived endothelial cell lines that either inhibited or permitted the development of erythroid or B cells. We utilized a differential gene expression method to isolate a chemokine, termed WECHE, from one of these cell lines. WECHE inhibited the formation of erythroid cells but had no effect on either myeloid or B cell formation. WECHE repressed BFU-E development from either mouse fetal liver or bone marrow progenitor cells but had no effect on colony formation induced by IL-3 or IL-7. WECHE reduced HPP-CFC production from fetal liver-derived stem cells. WECHE hindered the growth of yolk sac-derived endothelial cells. WECHE was also chemotactic for bone marrow cells. Thus, WECHE is a novel chemokine that regulates hematopoietic differentiation.