Although great progress has been made in the isolation and culture of stem cells, the future of stem-cell-based therapies and their productive use in drug discovery and regenerative medicine depends on two key factors: finding reliable sources of multipotent and pluripotent cells and the ability to control their differentiation to generate desired derivatives. It is essential for clinical applications to establish reliable sources of pathogen-free human embryonic stem cells (ESCs) and develop suitable differentiation techniques. Here, we address some of the problems associated with the sourcing of human ESCs and discuss the current status of stem-cell differentiation technology.