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All formed elements arise from stem cells of the red bone marrow. Recall that stem cells undergo mitosis plus cytokinesis (cellular division) to give rise to new daughter cells: One of these remains a stem cell and the other differentiates into one of any number of diverse cell types.
Discovered in the 1960s, blood stem cells (haematopoietic stem cells) were the first stem cells to ever be discovered. Blood stem cells primarily reside in bone marrow and make all the cells found in blood, including cells important for the immune system. Transplants of blood stem cells have become widely used to treat diseases such as leukaemia, anaemia and autoimmune diseases.