Numerous papers have reported that mesenchymal stem cells (MSCs) can be isolated from various sources such as bone marrow, adipose tissue and others. Nonetheless it is an open question whether MSCs isolated from different sources represent a single cell lineage or if cells residing in different organs are separate members of a family of MSCs. Subendothelial tissue of the umbilical cord vein has been shown to be a promising source of MSCs. The aim of this study was to isolate and characterize cells derived from the subendothelial layer of umbilical cord veins as regards their clonogenicity and differentiation potential. The results from these experiments show that cells isolated from the umbilical cord vein displayed fibroblast-like morphology and grew into colonies. Immunophenotyping by flow cytometry revealed that the isolated cells were negative for the hematopoietic line markers HLA-DR and CD34 but were positive for CD29, CD90 and CD73. The isolated cells were also positive for survivin, Bcl-2, vimentin and endoglin, as confirmed by RT-PCR and immunofluorescence. These cells can be induced to differentiate into osteogenic and adipogenic cells, but a new finding is that these cells can be induced to differentiate into endothelial cells expressing CD31, vWF and KDR-2, and also form vessel-like structures in Matrigel. The differentiated cells stopped expressing survivin, thus showing a diminished proliferative potential. It can be assumed that the subendothelial layer of the umbilical cord vein contains a population of cells with the overall characteristics of MSCs, with the additional capability to transform into endothelial cells.