Autologous umbilical cord blood (UCB) is a possible, but unproven, treatment for acute neonatal brain damage. Mesenchymal stem cells (MSCs), which are present in UCB, are likely to be the treating cell type. UCB is effective in the treatment of neonatal rodent hypoxic-ischemic injury (HI) and other types of brain injury when the cells are delivered acutely. Other types of adult stem cells are similarly effective. However, several negative studies have been reported. The most likely mechanisms of action are participation in blood vessel regeneration, improvement of survival of intrinsic cells, perhaps via neurotrophic factors, or suppression of the release of inflammatory cells from the spleen. In the latter case, the splenic inflammatory cells released at the time of injury are thought to have an adverse effect on brain injury. The timing of the administration of the UCB with respect to the time of the injury appears to be the most important issue: the earlier the better. The risks of autologous administration of UCB are minimal. Current clinical trials with UCB are in progress, but there are no peer-reviewed reports as yet. A multicenter trial with specific inclusion criteria is needed.