We present a method for parameter estimation in a two-compartment hidden Ma
rkov model of the first two stages of hematopoiesis. Hematopoiesis is the s
pecialization of stern cells into mature blood cells. As stem cells are not
distinguishable in bone marrow, little is known about their behavior, alth
ough it is known that they have the ability to self-renew or to differentia
te to more specialized (progenitor) cells. We observe progenitor cells in s
amples of bone marrow taken from hybrid cats whose cells contain a natural
binary marker. With data consisting of the changing proportions of this bin
ary marker over time from several cats, estimates for stem cell self-renewa
l and differentiation parameters are obtained using an estimating equations
approach.