Stem cell research offers great promise for understanding basic mechanisms of human development and differentiation, as well as the hope for new treatments for diseases such as diabetes, spinal cord injury, Parkinson's disease, and myocardial infarction. However, human stem cell (hSC) research also raises sharp ethical and political controversies. The derivation of pluripotent stem cell lines from oocytes and embryos is fraught with disputes about the onset of human personhood. The reprogramming of somatic cells to produce induced pluripotent stem cells avoids the ethical problems specific to embryonic stem cell research. In any hSC research, however, difficult dilemmas arise regarding sensitive downstream research, consent to donate materials for hSC research, early clinical trials of hSC therapies, and oversight of hSC research. These ethical and policy issues need to be discussed along with scientific challenges to ensure that stem cell research is carried out in an ethically appropriate manner. This article provides a critical analysis of these issues and how they are addressed in current policies.