Generation of bone marrow (BM) from embryonic stem cells (ESCs) or induced pluripotent stem cells (iPSCs) promises to accelerate the development of future cell therapies for life-threatening disorders. However, such approach is limited by technical challenges to produce a mixture of functional BM progenitor cells able to replace all hematopoietic cell lineages. Herein, we used blastocyst complementation to simultaneously produce all BM hematopoietic cell lineages from mouse ESCs in a rat. Based on FACS analysis and single-cell RNA sequencing, mouse ESCs differentiated into hematopoietic progenitor cells and multiple hematopoietic cell types that were indistinguishable from normal mouse BM cells based on gene expression signatures and cell surface markers. Transplantation of ESC-derived BM cells from mouse-rat chimeras rescued lethally-irradiated syngeneic mice and resulted in long-term contribution of donor cells to hematopoietic cell lineages. Altogether, a fully functional bone marrow was generated from mouse ESCs using rat embryos as “bioreactors”.