The microenvironments, in which B lymphocytes develop in fetal liver, are largely still unknown. Among the nonhematopoietic cells, we have identified and FACS-separated two subpopulations, CD45(-) TER119(-) VCAM-1(+) cells that are either CD105(high) LYVE-1(high) or CD105(low) ALCAM(high) . Immunohistochemical analyses find three of four c-Kit(+) IL-7Rα(+) B220(low) CD19(-) SLC(-) B progenitors in contact with vascular endothelial-type LYVE-1(high) cells on embryonic day 13.5. One day later c-Kit(+) IL-7Rα(+) cells develop to CD19(- and +) , SLC-expressing, DHJH-rearranged pre/pro and pro/preB-I cells. Less than 10% are still in contact with LYVE-1(high) cells, but half of them are now in contact with mesenchymally derived ALCAM(high) liver cells. All of these ALCAM(high) cells, but not the LYVE-1(high) cells produce IL-7 and CXCL12, while both produce CXCL10. Progenitors and pro/preB-I cells are chemoattracted in vitro toward CXCL10 and 12, suggesting that lymphoid progenitors with Ig gene loci in germline configuration enter the developing fetal liver at E13.5 from vascular endothelium, attracted by CXCL10, and then migrate within a day to an ALCAM(high) liver cell microenvironment, differentiating to DHJH-rearranging, surrogate light chain-expressing pre/proB and pro/preB-I cells, attracted by CXCL10 and 12. Between E15.5 and E16.5 preB-I cells expand 10-fold in continued contact with ALCAM(high) cells and begin VH- to DHJH-rearrangements in further differentiated c-Kit(-) IL-7Rα(-) preBII cells. STEM Cells 2013;31:2800-2812.