The presence of non-hematopoietic stem cells in the human umbilical cord blood (hUCB) is debated. In this study, we report the isolation of a population of fibroblast-like cells with osteogenic and adipogenic potential that resembles the stromal stem cells found in the bone marrow. Low-density mononuclear cells isolated from hUCB formed few adherent colonies with fibroblast-like morphology after a few days in culture. At confluence, the polyclonal cell populations were characterized. Using FACS analysis and immunocytochemistry, the cells were found to express HLA-ABC, CD9, vimentin, the b subunit of prolyl-4-hydroxylase, integrins a1(CD49a), integrin a3 (CD49c), integrin a5(CD49e), and cytokeratin 18. Furthermore, the cells expressed constitutively transcripts of osteoblast-specific markers: Cbfa1/Runx2, alkaline phosphatase (AP), and collagen type I, and formed a mineralized matrix in vitro visualized by Alizarin red staining. In the presence of normal horse serum and dexamethasone (10(-7) M), the cells formed foci of adipocytes. When the cells were implanted mixed with hydroxyapatite/tricalcium phosphate powder in the subcutis of immunocompromised mice for 8 weeks, they formed osteogenic tissue and a myelosupportive microenviroment that enclosed hematopoietic cells and adipocytes. Our results demonstrate the presence of circulating stem cells with osteogenic and adipogenic differentiation potential in hUCB and may encourage the use of hUCB as a potential source for stem cells to be utilized in cell therapy protocols for various diseases.