Cells isolated from the placenta have been the subject of intense investigation because many of the cells express characteristics of multipotent or even pluripotent stem cells. Cells from the placental tissues such as amnion and chorion have been reported to display multilineage differentiation and surface marker and gene expression patterns consistent with embryonic stem (ES) and mesenchymal stem cells, respectively. We have reported that epithelial cells isolated from term placenta contain cells that express surface markers such as the stage-specific embryonic antigens (SSEA) and a gene expression profile that is similar to ES cells. When subjected to specific differentiation protocols, amniotic epithelial cells display markers of differentiation to cardiomyocytes, neurons, pancreatic cells and hepatocytes. If specific and efficient methods could be developed to induce differentiation of these cells to hepatocytes, the amnion may become a useful source of cells for hepatocyte transplants. Cells isolated from amnion also have some unique properties as compared to some other stem cell sources in that they are isolated from a tissue that is normally discarded following birth, they are quite plentiful and easily isolated and they do not produce tumors when transplanted. Cells isolated from the amnion may be a uniquely useful and noncontroversial stem cell source.