There is a difference in the susceptibility to inflammation between the umbilical vein (UV) and the umbilical arteries (UAs). This led us to hypothesize that there is an intrinsic difference in the pro-inflammatory response between UA and UV. Real-time quantitative RT-PCR and microarray analysis revealed higher expression of interleukin (IL)-1beta and IL-8 mRNA in the UV and differential expression of 567 genes between the UA and UV associated with distinct biological processes, including the immune response. Differential expression of human leukocyte antigen (HLA)-DRA mRNA between the UA and UV was due to unexpected HLA-DR(+) cells migrating via the umbilical vessels into Wharton's jelly, more frequently in the UV. A significant proportion of these cells co-expressed CD45 and type I pro-collagen, and acquired CD163 or alpha-smooth muscle actin immunoreactivity in Wharton's jelly. Migrating cells were also found in the chorionic and stem villous vessels. Furthermore, the extent of migration increased with progression of gestation, but diminished in intrauterine growth restriction (IUGR). The observations herein strongly suggest that circulating foetal fibrocytes, routing via umbilical and placental vessels, are a reservoir for key cellular subsets in the placenta. This study reports fibrocytes in the human umbilical cord and placenta for the first time, and a novel role for both circulating foetal cells and the umbilical vessels in placental development, which is deranged in IUGR.