The hematopoietic stem cell is the mother cell for both red and white blood cells. The process by which the hematopoietic stem cell decides to differentiate is complex involving cytokine stimulation that activates (or deactivates) certain gene expression within the cell. Cytokines are chemical signals that are released by the cell and influence the behavior of other cells (e.g. cause them to differentiate into a particular cell line). Examples of cytokines that influence differentiation of the hematopoietic stem cell include stem cell factor (SCF), Flt3 Ligand (FL), interleukin 3 (IL-3), GM-CSF, interleukin 6 (IL-6) and interleukin 11 (IL-11). These cytokines act over short distances within the bone marrow (and other sites of hematopoiesis e.g. thymus) where red and white blood cells are produced. Erythropoietin (EPO) is the only hematopoietic cytokine that actually does work as a true hormone (produced by the kidney and travels to the bone marrow to stimulate red blood cell production).

White blood cells consist of granulocytes (neutrophils, basophils, eosinophils) and agranulocytes (monocytes and lymphocytes). These white blood cells along with the red blood cells all differentiate from the hematopoietic stem cell. The hematopoietic stem cell differentiates into the multipotential progenitor cell and then becomes either a common myeloid or common lymphoid progenitor. The lymphocytes arise from the lymphoid lineage and the granulocytes, RBCs, and monocytes all arise from the myeloid lineage. As such there are multiple steps in the process of hematopoiesis (creation of RBCs, WBCs, platelets) that are directed by cytokine signaling. The interplay of these cytokines is extremely complex and work is still being done to understand how WBCs are created. See this figure of hematopoiesis: