The main barrier to a broader clinical application of umbilical cord blood (UCB) transplantation is its limiting cellular content. Thus, the discovery of hematopoietic progenitor cells in murine placental tissue led us investigate whether the human placenta contains hematopoietic cells, sites of hematopoiesis, and to develop a procedure of processing and storing placental hematopoietic cells for transplantation. Here we show that the human placenta contains large numbers of CD34-expressing hematopoietic cells, with the potential to provide a cellular yield several-fold greater than that of a typical UCB harvest. Cells from fresh or cryopreserved placental tissue generated erythroid and myeloid colonies in culture, and also produced lymphoid cells after transplantation in immunodeficient mice. These results suggest that human placenta could become an important new source of hematopoietic cells for allogeneic transplantation.