Expansion of hematopoietic stem cells (HSCs) from cord blood is highly desired for treatment and transplantation of adult patients for hematologic diseases. For efficient proliferation of HSCs, CD34(+) cells from cord blood were co-cultured with microencapsulated murine stromal cells (HESS-5) or immortalized human mesenchymal stem cells (MSCs) in their conditioned media (CM). Bioactive substances for HSC proliferation in CM at the onset of culture are likely consumed by HSCs with time, and co-culturing with microencapsulated feeder cells ensures a continuous supply. The cell number of CD34(+) cell progeny efficiently increased under these culture conditions, and progeny were analyzed by flow cytometry, the colony assay and the cobblestone area-forming cell (CAFC) assay. Total nucleated cells and CD34(+) cell number increased 194- and 7.4-fold, respectively, in the presence of microencapsulated HESS-5 in CM. Colony forming cells and CAFCs were well maintained. The effective expansion of total cells and maintenance of primitive progenitor cells suggest that transfusion of the progeny obtained from CD34(+) cell culture with microencapsulated HESS-5 in CM could shorten the time to engraftment by bridging the pancytopenic period and support functional hematopoietic repopulation.