Adult stem cells, such as human mesenchymal stem cells (hMSCs), show limited proliferative capacity and, after long-term culture, lose their differentiation capacity and are therefore not an optimal cell source for tissue engineering. Human embryonic stem cells (hESCs) constitute an important new resource in this field, but one major drawback is the risk of tumor formation in the recipients. One alternative is to use progenitor cells derived from hESCs that are more lineage restricted but do not form teratomas. We have recently derived a cell line from hESCs denoted hESC-derived mesodermal progenitors (hES-MPs), and here, using genome-wide microarray analysis, we report that the process of hES-MPs derivation results in a significantly altered expression of hESC characteristic genes to an expression level highly similar to that of hMSCs. However, hES-MPs displayed a significantly higher proliferative capacity and longer telomeres. The hES-MPs also displayed lower expression of HLA class II proteins before and after interferon-gamma treatment, indicating that these cells may somewhat be immunoprivileged and potentially used for HLA-incompatible transplantation. The hES-MPs are thus an appealing alternative to hMSCs in tissue engineering applications and stem-cell-based therapies for mesodermal tissues.