In utero transplantation (IUT) is becoming a viable option for the treatment of various immune and metabolic disorders diagnosed early in gestation. In this study, donor fetal liver cells had a 10-fold competitive engraftment advantage relative to adult bone marrow in allogeneic fetal severe combined immunodeficient (SCID) recipients compared with adult recipients. In contrast, adult bone marrow cells engrafted slightly better than fetal liver cells in allogeneic adult SCID transplant recipients. By using different ratios of fetal and adult cell mixtures, fetal liver cells repopulated 8.2 times better than adult bone marrow cells in fetal recipients, but only 0.8 times as well in adult recipients. Fetal SCID recipients were more permissive to an allogeneic donor graft than adult recipients. These data indicate that the recipient microenvironment may regulate the engraftment efficiency of a given stem cell source and suggest that the use of cord blood should be tested in clinical IUT.