Bone marrow is a spongy substance found in the center of the bones. It manufactures bone marrow stem cells and other substances, which in turn produce blood cells. Each type of blood cell made by the bone marrow has an important job. Red blood cells carry oxygen to tissues in the body. The stem cells can develop into the red blood cells that carry oxygen through your body, the white blood cells that fight infections, and the platelets that help with blood clotting.