Placental tissue draws great interest as a source of cells for regenerative medicine because of the phenotypic plasticity of many of the cell types isolated from this tissue. Furthermore, placenta, which is involved in maintaining fetal tolerance, contains cells that display immunomodulatory properties. These two features could prove useful for future cell therapy-based clinical applications. Placental tissue is readily available and easily procured without invasive procedures, and its use does not elicit ethical debate. Numerous reports describing stem cells from different parts of the placenta, using nearly as numerous isolation and characterization procedures, have been published. Considering the complexity of the placenta, an urgent need exists to define, as clearly as possible, the region of origin and methods of isolation of cells derived from this tissue. On March 23-24, 2007, the first international Workshop on Placenta Derived Stem Cells was held in Brescia, Italy. Most of the research published in this area focuses on mesenchymal stromal cells isolated from various parts of the placenta or epithelial cells isolated from amniotic membrane. The aim of this review is to summarize and provide the state of the art of research in this field, addressing aspects such as cell isolation protocols and characteristics of these cells, as well as providing preliminary indications of the possibilities for use of these cells in future clinical applications.