Migration of hemopoietic stem and progenitor cells (HSPC) is required for homing to bone marrow following transplantation. Therefore, it is critical to understand signals underlying directional movement of HSPC. Stromal cell-derived factor-1 (SDF-1)/CXCL12 is a potent chemoattractant for HSPC. In this study, we demonstrate that the serine-threonine protein phosphatase (PP)2A plays an important role in regulation of optimal level and duration of Akt/protein kinase B activation (a molecule important for efficient chemotaxis), in response to SDF-1. Inhibition of PP2A, using various pharmacological inhibitors of PP2A including okadaic acid (OA) as well as using genetic approaches including dominant-negative PP2A-catalytic subunit (PP2A-C) or PP2A-C small interfering RNA, in primary CD34(+) cord blood (CB) cells led to reduced chemotaxis. This was associated with impairment in polarization and slower speed of movement in response to SDF-1. Concomitantly, SDF-1-induced Akt phosphorylation was robust and prolonged. Following SDF-1 stimulation, Akt and PP2A-C translocate to plasma membrane with enhanced association of PP2A-C with Akt observed at the plasma membrane. Inhibition of PI3K by low-dose LY294002 partially recovered chemotactic activity of cells pretreated with OA. In addition to chemotaxis, adhesion of CD34(+) cells to fibronectin was impaired by OA pretreatment. Our study demonstrates PP2A plays an important role in chemotaxis and adhesion of CD34(+) CB cells in response to SDF-1. CD34(+) CB cells pretreated with OA showed impaired ability to repopulate NOD-SCID mice in vivo, suggesting physiological relevance of these observations.