SUMMARY Hematopoietic stem and progenitor cells (HSPCs) can reconstitute and sustain the entire blood system. We generated a highly specific transgenic reporter of HSPCs in zebrafish. This allowed us to perform high-resolution live imaging on endogenous HSPCs not currently possible in mammalian bone marrow. Using this system we have uncovered distinct interactions between single HSPCs and their niche. When an HSPC arrives in the perivascular niche, a group of endothelial cells remodel to form a surrounding pocket. This structure appears conserved in mouse fetal liver. Correlative light and electron microscopy revealed that endothelial cells surround a single HSPC attached to a single mesenchymal stromal cell. Live imaging showed mesenchymal stromal cells anchor HSPCs and orient their divisions. A chemical genetic screen found the compound lycorine promotes HSPC-niche interactions during development and ultimately expands the stem cell pool into adulthood. Our studies provide evidence for dynamic niche interactions upon stem cell colonization.