AbstractUmbilical cord blood (CB) has become a commonly accepted source of hematopoietic stem cells for transplantation in children and adults. It is readily available and outperforms bone marrow (BM) as well as peripheral blood stem cells in terms of tolerance for HLA‐mismatches between donor and recipient and its decreased graft‐versus‐host disease. Clinical use has been expanded from hematological malignancies to various areas such as treatment of metabolic genetic disorders or to induce angiogenesis. For the last years CB has been under intense experimental investigation in in vitro differentiation models as well as in preclinical animal models. Since CB‐derived stem cells offer multiple advantages over adult stem cells from other sources like BM, CB may provide a future source of stem cells for tissue repair and regeneration. To facilitate the use of CB‐derived stem cells in clinical scenarios, the biology of these cells needs to be further explored in detail particularly with regard to the fact that different non‐hematopoietic stem cell populations occur within CB. Here we explore the most consistent and the most contradictory data referring to the differentiation potential of CB‐derived stem cells and give an outlook on their potential clinical value including and possible reprogramming into IPS cells. J. Cell. Biochem. 108: 762–768, 2009. © 2009 Wiley‐Liss, Inc.