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The bone marrow (BM) microenvironment serves as a stem cell niche regulating the in vivo cell fate of normal hematopoietic stem cells (HSC) as well as leukemia stem cells (LSCs). Accumulating studies have indicated that the regeneration of normal HSCs and the process of leukemogenesis change with advancing age. However, the role of microenvironmental factors in these age-related effects are unclear. Here, we compared the stem cell niche in neonatal and adult BM to investigate potential differences in their microenvironmental regulation of both normal and leukemic stem cells. We found that the mesenchymal niche in neonatal BM, compared to adult BM, was characterized by a higher frequency of primitive subsets of mesenchymal stroma expressing both platelet-derived growth factor receptor and Sca-1, and higher expression levels of the niche cross-talk molecules, Jagged-1 and CXCL-12. Accordingly, normal HSCs transplanted into neonatal mice exhibited higher levels of regeneration in BM, with no difference in homing efficiency or splenic engraftment compared to adult BM. In contrast, in vivo self-renewal of LSCs was higher in adult BM than in neonatal BM, with increased frequencies of leukemia-initiating cells as well as higher lympho-myeloid differentiation potential towards biphenotypic leukemic cells. These differences in LSC self-renewal capacity between neonates and adults was abrogated by switching of recipients, confirming their microenvironmental origin. Our study provides insight into the differences in leukemic diseases observed in childhood and adults, and is important for interpretation of many transplantation studies involving neonatal animal models. [ABSTRACT FROM AUTHOR]