Phosphoinositide 3-kinase (PI3K)-dependent signalling regulates a wide variety of cellular functions including proliferation and differentiation. Disruption of class I-A PI3K isoforms has implicated PI3K- mediated signalling in development of the early embryo and lymphohaemopoietic system. We have used embryonic stem (ES) cells as an in vitro model to study the involvement of PI3K-dependent signalling during early development and haemopoiesis. Both pharmacological inhibition and genetic manipulation of PI3K-dependent signalling demonstrate that PI3K-mediated signals, most likely via 3-phosphoinositide-dependent protein kinase 1 (PDK1), are required for proliferation of cells within developing embryoid bodies ( EBs). Surprisingly, the haemopoietic potential of EB-derived cells was not blocked upon PI3K inhibition but rather enhanced, correlating with modest increases in expression of haemopoietic marker genes. By contrast, PDK1-deficient EB-derived progeny failed to generate terminally differentiated haemopoietic lineages. This deficiency appeared to be due to a requirement for PI3K signalling during the proliferative phase of blast-colony-forming cell (BL-CFC) expansion, rather than as a result of effects on differentiation per se. We also demonstrate that PI3K-dependent signalling is required for optimal generation of erythroid and myeloid progenitors and their differentiation into mature haemopoietic colony types. These data demonstrate that PI3K- dependent signals play important roles at different stages of haemopoietic development.