Embryonic stem cells (ESCs) have previously been reported to reprogram somatic cells following fusion. The resulting ES-somatic cell hybrids have been shown to adopt the transcriptional profile of ESCs, suggesting that the pluripotent program is dominant. ES-somatic cell hybrids have most characteristics of pluripotent cells in vitro; however, it remains unclear whether the somatic genome is an active partner in the hybrid cells or simply retained predominately as silent cargo. Furthermore, the functional properties of ES-somatic cell hybrids in vivo have been limited to studies on their contribution to teratomas and developing embryos/chimeras. The extent of their pluripotency remains largely unclear. Here we determined that the somatic genome is actively transcribed by generating ES-somatic cell hybrids using Rag2-deficient ESCs fused to autologous wild-type somatic cells. Rag2 expression was detected during in vitro differentiation, suggesting that the somatic genome follows the correct temporal cues during differentiation. Furthermore, ES-somatic cell hybrids maintain their tetraploid state following 4 weeks of differentiation in vivo and are immune tolerated when transferred into matched individuals. The ES-somatic cell hybrids can efficiently differentiate into hematopoietic precursors in both myeloid and lymphoid lineages in vitro, suggesting that the somatic genome is actively transcribed following cell fusion based reprogramming. However, the ES-somatic cell hybrids showed an altered hematopoietic potential following in vitro differentiation and were unable to show hematopoietic engraftment in a mouse model.