Evidence has emerged that mesenchymal stem cells (MSCs) represent a promising population for supporting new clinical concepts in cellular therapy. However, attempts to isolate MSCs from umbilical cord blood (UCB) of full-term deliveries have previously either failed or been characterized by a low yield. We investigated whether cells with MSC characteristics and multi-lineage differentiation potential can be cultivated from UCB of healthy newborns and whether yields might be maximized by optimal culture conditions or by defining UCB quality criteria. Using optimized isolation and culture conditions, in up to 63% of 59 low-volume UCB units, cells showing a characteristic mesenchymal morphology and immune phenotype (MSC-like cells) were isolated. These were similar to control MSCs from adult bone marrow (BM). The frequency of MSC-like cells ranged from 0 to 2.3 clones per 1 x 10(8) mononuclear cells (MNCs). The cell clones proliferated extensively with at least 20 population doublings within eight passages. In addition, osteogenic and chondrogenic differentiation demonstrated a multi-lineage capacity comparable with BM MSCs. However, in contrast to MSCs, MSC-like cells showed a reduced sensitivity to undergo adipogenic differentiation. Crucial points to isolate MSC-like cells from UCB were a time from collection to isolation of less than 15 hours, a net volume of more than 33 ml, and an MNC count of more than 1 x 10(8) MNCs. Because MSC-like cells can be isolated at high efficacy from full-term UCB donations, we regard UCB as an additional stem cell source for experimental and potentially clinical purposes.