Clinically compliant human embryonic stem cells (hESCs) should be developed in adherence to ethical standards, without risk of contamination by adventitious agents. Here we developed for the first time animal-component free and good manufacturing practice (GMP)-compliant hESCs. After vendor and raw material qualification, we derived xeno-free, GMP-grade feeders from umbilical cord tissue, and utilized them within a novel, xeno-free hESC culture system. We derived and characterized three hESC lines in adherence to regulations for embryo procurement, and good tissue, manufacturing and laboratory practices. To minimize freezing and thawing, we continuously expanded the lines from initial outgrowths and samples were cryopreserved as early stocks and banks. Batch release criteria included DNA-fingerprinting and HLA-typing for identity, characterization of pluripotency-associated marker expression, proliferation, karyotyping and differentiation in-vitro and in-vivo. These hESCs may be valuable for regenerative therapy. The ethical, scientific and regulatory methodology presented here may serve for development of additional clinical-grade hESCs.