Umbilical cord blood collected from the postpartum placenta and cord is a rich source of hematopoietic stem cells (HSCs) and is an alternative to bone marrow transplantation. In this review we wanted to describe the differences (in phenotype, cytokine production, quantity and quality of cells) between stem cells from umbilical cord blood, bone marrow and peripheral blood. HSCs present in cord blood are more primitive than their counterparts in bone marrow or peripheral blood, and have several advantages including high proliferation. With using proper cytokine combination, HSCs can be effectively developed into different cell lines. This process is used in medicine, especially in hematology.