In this article we summarize the clinical outcome of unrelated placental/umbilical cord blood (CB) transplantation, discuss the biological characteristics of CB hematopoietic progenitor/stem cells (HPC) and balance the relative advantages and disadvantages of this therapy as compared with transplantation of other HPC sources. Moreover, we discuss CB banking programs at local, national and international levels. The data reported by the investigators of the New York Placental/Umbilical Cord Blood Program and of the Eurocord group indicate that the clinical outcome of allogeneic unrelated CB transplantation is significantly related to cell dose, being more effective in children than in adults, and is highly dependent on disease stage at transplantation. Furthermore, both studies show lower graft-versus-host disease (GvHD) frequency and severity and prolonged time intervals for platelet engraftment as compared to those of bone marrow and mobilized peripheral blood recipients. Although the data from the New York Placental/Umbilical Cord Blood Program seem to support a negative effect of HLA differences, the latter were not significantly associated with survival in the Eurocord series. Additional observations are therefore necessary to collect conclusive evidence in this regard. Currently available data show that CB contains a higher proportion of primitive HPC and that CB-HPC possess higher proliferation and expansion potentials as compared to adult bone marrow. Furthermore, there is some evidence indicating that CB-HPC are more adequate than HPC from other sources for genetic manipulation and gene therapy. Despite the significant advances in the knowledge of the biology and in the clinical use of CB, a number of problems remain unsolved, including the standardization of banking procedures and unit quality and the development of suitable protocols for transplantation of adult patients.