CD26, a surface serine dipeptidylpeptidase IV (DPPIV) expressed on different cell types, cleaves the amino-terminal dipeptide from some chemokines, including stromal-derived factor-1 (SDF-1/CXCL12). SDF-1/CXCL12 plays important roles in hematopoietic stem cell (HSC) homing, engraftment, and mobilization. Inhibition of CD26 peptidase activity enhances homing, engraftment, and competitive repopulation in congenic mouse bone marrow cell transplants. Our studies evaluated a role for CD26 in in vivo engraftment of HSCs from human umbilical cord blood (CB) into nonobese diabetic/severe combined immunodeficiency (NOD/SCID) mice. Pretreating purified CD34+ human CB cells with Diprotin A, a DPPIV inhibitor, for 15 min significantly enhanced engraftment. Treatment did not affect differentiation of CD34+ cells in vivo, as measured phenotypically by human markers CD33, CD38, CD19, and CD34. We found that the percentage of CD26+ cells within the more immature cells (CD34+CD38-) was significantly higher than in the more mature population (CD34+CD38+). These results suggest that inhibition of CD26 may be one way to enhance engraftment of limiting numbers of stem cells during CB transplantation.