Background Hematopoietic progenitors are generated in the yolk sac and aorta-gonad-mesonephros region during early mouse development. At embryonic day 10.5 the first hematopoietic stem cells emerge in the aorta-gonad-mesonephros. Subsequently, hematopoietic stem cells and progenitors are found in the fetal liver. The fetal liver is a potent hematopoietic site, playing an important role in the expansion and differentiation of hematopoietic progenitors and hematopoietic stem cells. However, little is known concerning the regulation of fetal liver hematopoietic stem cells. In particular, the role of cytokines such as interleukin-1 in the regulation of hematopoietic stem cells in the embryo has been largely unexplored. Recently, we observed that the adult pro-inflammatory cytokine interleukin-1 is involved in regulating aorta-gonad-mesonephros hematopoietic progenitor and hematopoietic stem cell activity. Therefore, we set out to investigate whether interleukin-1 also plays a role in regulating fetal liver progenitor cells and hematopoietic stem cells. Design and Methods We examined the interleukin-1 ligand and receptor expression pattern in the fetal liver. The effects of interleukin-1 on hematopoietic progenitor cells and hematopoietic stem cells were studied by FACS and transplantation analyses of fetal liver explants, and in vivo effects on hematopoietic stem cell and progenitors were studied in Il1r1(-/-) embryos. Results We show that fetal liver hematopoietic progenitor cells express the IL-1RI and that interleukin-1 increases fetal liver hematopoiesis, progenitor cell activity and promotes hematopoietic cell survival. Moreover, we show that in Il1r1(-/-) embryos, hematopoietic stem cell activity is impaired and myeloid progenitor activity is increased. Conclusions The IL-1 ligand and receptor are expressed in the midgestation liver and act in the physiological regulation of fetal liver hematopoietic progenitor cells and hematopoietic stem cells.