Bone marrow transplantation has rapidly progressed over the last two decades offering cure and prolonged disease-free survival for patients suffering from certain hemato-oncological malignancies or metabolic disorders. However, bone marrow transplantation is limited by the paucity of major histocompatibility loci antigen (HLA)- matched donors, and the morbidity and mortality due to graft-versus-host disease. Recently it has been shown, that umbilical cord blood represents a unique source of transplantable hematopoietic progenitor cells. Currently, human umbilical cord blood from a newborn sibling has been used successfully for hematopoietic reconstitution of approximately 40 children with congenital or malignant diseases. Establishment of umbilical cord blood banks might alleviate some of the problems associated with bone marrow transplantation. The developments in this field which have occurred during the last decade, as well as the importance of cooperation between the obstetric and transplantation staff, are discussed in this review. Certain ethical problems remain surrounding the issue of using human umbilical cord blood for allogeneic transplantation which must be addressed.