Embryonic stem (ES) cells are revolutionizing the field of developmental biology as a potential tool to understand the molecular mechanisms occurring during the process of differentiation from the embryonic stage to the adult phenotype. ES cells harvested from the inner cell mass (ICM) of the early embryo can proliferate indefinitely in vitro while retaining the ability to differentiate into all somatic cells. Emerging results from mice models with ES cells are promising and raising tremendous hope among the scientific community for the ES-cell based cell replacement therapy (CRT) of various severe diseases. ES cells could potentially revolutionize medicine by providing an unlimited renewable source of cells capable of replacing or repairing tissues that have been damaged in almost all degenerative diseases such as diabetes, myocardial infarction and Parkinson's disease. This review updates the progress of ES cell research in CRT, discusses about the problems encountered in the practical utility of ES cells in CRT and evaluates how far this approach is successful experimentally.