Umbilical cord blood is an appealing alternative source of hematopoietic stem cells for children and adults undergoing transplantation for a wide variety of diseases. Shorter time to transplant, which is particularly relevant for patients requiring urgent transplantation, and tolerance of 1–2 human leukocyte antigen mismatches, which increases the chance of finding a suitable donor, are evident advantages over bone marrow transplantation from unrelated donors. The speed of engraftment is slower after cord blood transplantation, but this is counterbalanced by a lower incidence of severe graft-versus-host disease. Cell dose and human leukocyte antigen are major factors influencing the outcomes of umbilical cord blood transplantation. Unrelated donor cord blood is considered an acceptable alternative to bone marrow for pediatric transplantation, and recent data in adults point the same way. This review describes the current status of cord blood transplantation and discusses developing research strategies aimed at optimizing this kind of transplantation.