Development of the immune system is depicted as a hierarchical process of differentiation from hematopoietic stem cells to lineage-committed precursors which further develop into mature immune cells. In the case of dendritic cell (DC) development, this linear precursor-progeny approach has led to a confused picture of relationships between various subsets of DC identified in vivo. A possible reconciliation of the diversity of DC precursors and DC subsets in vivo can be achieved by assessing the role of the microenvironment in DC hematopoiesis. One model is that the stromal cell microenvironment of different tissues supports the development of DC with distinct phenotype and functional capacity. Such a model can explain the existence of many DC subsets as well as the presence of DC progenitors in tissues other than bone marrow.