Background: Most pediatric cancers arise from immature cell types, and nearly all show a paucity of somatic mutation, indicating a significant link between pediatric cancer, germline variation and aberrant development. Infant leukemia (IL) is a unique and poorly understood pediatric leukemia with a mortality rate >50% and almost no somatic mutation. While IL has a high prevalence of KMT2A rearrangements (MLL-r), at physiological levels in HSCs these rearrangements fail to induce a short latency leukemia phenocopying IL in mammalian models when expressed at physiologic levels. IL arises in utero, suggesting derivation from a fetal progenitor. Hematopoietic development during embryogenesis is regulated spatio-temporally, with hematopoietic stem cell (HSC)-independent progenitors specified extra-embryonically, and HSC adult-like progenitors specified intra-embryonically. Previously, we have found that IL patients, independent of the presence of MLL-r, possess a significant enrichment of germline variation in COMPASS complex members, which strongly suggests that additional germline factors are required for IL transformation. COMPASS protein complexes are nucleated by members of the SET and MLL/KMT2 family. They have specific, non-overlapping and poorly understood roles in mesoderm and hematopoietic differentiation. In addition, several COMPASS members have been found to be recurrently mutated in various cancers and certain developmental defects. Methods: We have established multiple human iPSC lines (hPSC) from infant leukemia germline cells in order to characterize how each child’s germline variation impacts hematopoietic specification compared to human ESCs and hPSCs from healthy individuals with and without COMPASS gene knockouts and inducible MLL-r. Accessing hematopoietic progenitors in a human embryo is very challenging. However, by utilizing a unique, stage-specific human pluripotent stem cell differentiation strategy that can generate the progenitors of each of these programs, we can interrogate genetic and epigenetic mechanisms of normal and IL-associated hematopoietic development and transformation, respectively. Results: To date, we have genomic, epigenomic and functional results in these hPSCs demonstrating a crucial role for specific COMPASS members on the endothelial-to-hematopoietic transition (EHT) when CD34+ cells without MLL-r expression lose the ability to specify hematopoietic progenitors. Compared to wild type hPSCs, isogenic hPSCs with single gene COMPASS family knockouts demonstrate quantitative changes in histone modifications, even in the pluripotent state before any directed differentiation has begun. Conclusion: Like many pediatric cancers, IL appears to be more a developmental defect due to combinations of germline variation and acquired mutations that skew mechanisms of cell fate specification, rather than an aggregation of genetic errors as seen in adult cancers. These functional consequences of these combinations of variants and mutations can be best modeled in cells from the actual patients, reprogrammed to hPSCs and directed to the relevant cell fates. Future work will focus on xenograft studies with these cells to serve as preclinical models.