During the past decade, umbilical cord blood has emerged as a widely used source of stem cells for children and adults undergoing transplantation for a wide variety of malignant and nonmalignant diseases. Although large, prospective clinical trials have not yet been published demonstrating the true engraftment rate and incidence and severity of acute and chronic graft-versus-host disease, results suggest reliable engraftment and perhaps a lower incidence of severe graft-versus-host disease than anticipated with comparably matched bone marrow. Investigators continue to examine the biologic properties of umbilical cord blood. During the past year, important advances have been made in our understanding of the ontogeny of cord blood stem cells, migratory capacity, the ability to expand cord blood stem cellsin vitro, the alloreactivity of cord blood, and immune recovery after the transplantation of cord blood. It is anticipated that clinical advances in cord blood transplantation will soon follow as a result of these advances in cord blood biology.