The present invention relates to a method of producing an ungulate having both copies of the IgM heavy chain (mu) rag-1 and/or rag-2 gene eliminated from its genome. Animals which have IgM, rag-1 and/or rag-2 eliminated from their genome are unable to conduct the gene rearrangements that are necessary to generate the antigen receptors of B- or T-lymphocytes, and therefore will not develop native B- or T-cells. Because they are unable to produce B- and T-lymphocytes, these IgM, rag-1, or rag-2 ungulates cannot reject human hematopoietic stem cell preparations, and B- and T-lymphocytes which develop therefrom. Therefore, the present invention also involves injecting into IgM, rag-1, and/or rag-2 deficient ungulates, in utero or shortly after birth, human B- and T-lymphocytes whose immune systems produce human immunoglobulin that can be processed for therapeutic uses in humans.