We have developed a hematopoietic co-culture system using the hollow fiber bioreactor (HFBR) as a potential in vitro bone marrow model for evaluating leukemia. Supporting stroma using HS-5 cells was established in HFBR system and the current bioprocess configuration yielded an average glucose consumption of 640 mg/day and an average protein concentration of 6.40 mg/mL in the extracapillary space over 28 days. Co-culture with erythroleukemia K562 cells was used as a model for myelo-leukemic cell proliferation and differentiation. Two distinct localizations of K562 cells (loosely adhered and adherent cells) were identified and characterized after 2 weeks. The HFBR co-culture resulted in greater leukemic cell expansion (3,130 fold vs. 43 fold) compared to a standard tissue culture polystyrene (TCP) culture. Majority of expanded cells (68%) in HFBR culture were the adherent population, highlighting the importance of cell–cell contact for myelo-leukemic proliferation. Differentiation tendencies in TCP favored maturation toward monocyte and erythrocyte lineages but maintained a pool of myeloid progenitors. In contrast, HFBR co-culture exhibited greater lineage diversity, stimulating monocytic and megakaryocytic differentiation while inhibiting erythroid maturation. With the extensive stromal expansion capacity on hollow fiber surfaces, the HFBR system is able to achieve high cell densities and 3D cell–cell contacts mimicking the bone marrow microenvironment. The proposed in vitro system represents a dynamic and highly scalable 3D co-culture platform for the study of cell-stroma dependent hematopoietic/leukemic cell functions and ex vivo expansion. Biotechnol. Bioeng. 2012; 109:1248–1258. © 2011 Wiley Periodicals, Inc.