Self-renewal and differentiation are tightly controlled to maintain haematopoietic stem cell (HSC) homeostasis in the adult bone marrow1,2. During fetal development, expansion of HSCs (self-renewal) and production of differentiated haematopoietic cells (differentiation) are both required to sustain the haematopoietic system for body growth3,4. However, it remains unclear how these two seemingly opposing tasks are accomplished within the short embryonic period. Here we used in vivo genetic tracing in mice to analyse the formation of HSCs and progenitors from intra-arterial haematopoietic clusters, which contain HSC precursors and express the transcription factor hepatic leukaemia factor (HLF). Through kinetic study, we observed the simultaneous formation of HSCs and defined progenitors-previously regarded as descendants of HSCs5-from the HLF+ precursor population, followed by prompt formation of the hierarchical haematopoietic population structure in the fetal liver in an HSC-independent manner. The transcription factor EVI1 is heterogeneously expressed within the precursor population, with EVI1hi cells being predominantly localized to intra-embryonic arteries and preferentially giving rise to HSCs. By genetically manipulating EVI1 expression, we were able to alter HSC and progenitor output from precursors in vivo. Using fate tracking, we also demonstrated that fetal HSCs are slowly used to produce short-term HSCs at late gestation. These data suggest that fetal HSCs minimally contribute to the generation of progenitors and functional blood cells before birth. Stem cell-independent pathways during development thus offer a rational strategy for the rapid and simultaneous growth of tissues and stem cell pools.