Osteoblasts expressing the homophilic adhesion molecule N-cadherin form a hematopoietic stem cell (HSC) niche. Therefore, we examined how N-cadherin expression in HSCs relates to their function. We found that bone marrow (BM) cells highly expressing N-cadherin (N-cadherin^hi) are not stem cells, being largely devoid of a Lineage⁻Sca1⁺cKit⁺ population and unable to reconstitute hematopoietic lineages in irradiated recipient mice. Instead, long-term HSCs form distinct populations expressing N-cadherin at intermediate (N-cadherin^int) or low (N-cadherin^lo) levels. The minority N-cadherin^lo population can robustly reconstitute the hematopoietic system, express genes that may prime them to mobilize, and predominate among HSCs mobilized from BM to spleen. The larger N-cadherin^int population performs poorly in reconstitution assays when freshly isolated but improves in response to overnight in vitro culture. Their expression profile and lower cell-cycle entry rate suggest N-cadherin^int cells are being held in reserve. Thus, differential N-cadherin expression reflects functional distinctions between two HSC subpopulations.