Acute myeloid leukemia is a paradigm of cancer stem (or leukemia initiating) cells. Stem cell niche acts as a sanctuary for the stem cells that allow their survival, self-renewal and regulated proliferation. In parallel with leukemogenic events in the hematopoietic system, the niche is converted into an environment with dominant signals that favor cell proliferation and growth. Using ex-vivo culture, the present study simulated the bone marrow niche. Mononuclear cells from bone marrow aspirates of AML cases and controls were co-cultured on confluent mesenchymal stem cell layer. We estimated the percent of cells in G0 phase of the cell cycle and percentage of CD34+38- cells in the 3 layers of the ex-vivo culture. In AML cases, the distribution of the CD34+38- cells, revealed a significant difference between the 3 layers (p < 0.001), with a significantly lower percent in layer 3. A statistically significant difference between layer 3 of the cases and of the controls (p < 0.026), was also detected. No statistically significant difference in mean percentage of quiescent cells (PI+ Ki-67- ) was found on comparing the percentage of G0 cells in layer 1 and 2 of cases to those of control subjects. It was concluded that mesenchymal cell interaction with leukemic cells resulted in an altered distribution of the CD34+38- cell compartment when compared to normal but did not affect the cycling status of the cells.