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Abstract Rapid recovery of lymphocytes post hematopoietic cell transplantation (HCT) is correlated with positive patient outcome in treatments of hematologic disease. Few effective clinical therapies exist to augment lymphocyte recovery, indicating a clear unmet need. Ex vivo expansion of umbilical cord blood (CB) units is an FDA approved therapy to increase recovery of critical hematopoietic cells such as neutrophils and platelets, but impact on lymphocytes remains uncertain. Expansion under physiological oxygen conditions (physioxia; 1-14% O2) not only results in increased lymphoid-biased RNA levels and lymphocyte progenitor cell numbers, but also increases function of donor cells in murine models of transplantation. Thus, we hypothesized that transplantation with donor cells expanded under physioxia will enhance lymphocyte recovery in the post-transplant period. To address this hypothesis, murine hematopoietic stem and progenitor cells (HSPCs) were expanded in either 1, 3, 5, 14 or 21% O2 to represent physiological niches a donor cell would experience in vivo (1-14% O2) and standard ambient air laboratory processing (21% O2). Expanded HSPCs were then transplanted into lethally irradiated mice and peripheral blood (PB), bone marrow (BM), thymus, and spleen were harvested at weeks 5 or 10 post-transplant. Mice receiving 21% O2 expanded HSPCs received approximately 4x more nucleated cells, but decreased proportions of HSPCs, compared to 1% O2 donor cells. As a ratio of injected cells, mice transplanted with 1% O2 expanded HSPCs had increased natural killer (NK) cell frequencies at weeks 1 and 10 and increased CD4 and dendritic cell (DCs) frequencies at week 5 post HCT in the PB compared to transplantation with ambient air expanded HSPCs. This data suggests that on a per cell basis, 1% O2 HSPCs recover the lymphocyte compartment better than ambient air expanded HSPCs. Recovery of B cells, CD11b+ cells, and DCs in the bone marrow were increased in mice receiving 1% O2 expanded cells compared to ambient air expanded cells. Frequencies of donor derived long-term hemopoietic stem cells, common myeloid progenitors, and common lymphoid progenitors in the bone marrow did not change, suggesting an increase in function of physioxia expanded donor HSPCs is responsible for the increase in leukocyte recovery. In the PB, donor derived CD4 and CD8 T cells from the 1% O2 cohort had increased expression of CD44, a marker of homeostatic proliferation under lymphopenic conditions, compared to unmanipulated control (non-expanded; UNC) cells. In the spleen, donor derived lymphocytes in the 21% O2cohort trended to have reduced expression of CD44 compared to the 1% O2 and UNC cohort. Increased homeostatic proliferation shortly after transplant suggests that lymphocyte recovery in the PB and spleen is occurring more efficiently in the 1% O2 cohort compared to 21% O2 and UNC cohorts. Importantly, even though 1% O2 donor derived lymphocytes have increased homeostatic proliferation, activation and terminal differentiation markers such as CD107a and KLRG1 were unchanged. Moreover, function of mature donor derived T-lymphocytes was preserved. Upon PMA and ionomycin stimulation of splenocytes, we observed an equal ability of expanded and UNC donor derived T cells to produce IFNγ, TNFα, IL-2, and IL-10. Additional activation markers such as CD69, CD11a, and CD49d were unchanged on donor T lymphocytes between expanded cohorts, but increased in UNC cohorts. Together, our data suggests that physioxic expansion results in increased lymphocyte recovery on a per cell basis and that donor derived T lymphocytes retain their functionality and do not become activated in the post-transplant period. This is particularity beneficial to patients receiving CB as an allogeneic donor source, as CB recipients have delayed T cell recovery and reduced production of cytokines upon stimulation. Therefore, ex vivo expansion remains a viable option to improve function and recovery of lymphocytes post transplantation.