The recent isolation of fetal stem cells from several sources either at the early stages of development or during the later trimesters of gestation, sharing similar growth kinetics and expressing pluripotency markers, provides strong support to the notion that these cells may be biologically closer to embryonic stem cells, actually representing intermediates between embryonic stem cells and adult mesenchymal stem cells, regarding proliferation rates and plasticity features, and thus able to confer an advantage over postnatal mesenchymal stem cells derived from conventional adult sources such as bone marrow. This conclusion has been strengthened by the different pattern of growth potential between the two stage-specific types of sources, as assessed by transcriptomic and proteomic analysis. A series of recent studies regarding the numerous novel features of fetal stem cells has reignited our interest in the field of stem-cell biology and in the possibilities for the eventual repair of damaged organs and the generation of in vitro tissues on biomimetic scaffolds for transplantation. These studies, employing elegant approaches and novel technologies, have provided new insights regarding the nature and the potential of fetal stem cells derived from placenta, amniotic fluid, amnion or umbilical cord. In this update, we highlight the major progression that has occurred in fetal stem-cell biology and discuss the most important areas for future investigation in the field of regenerative medicine.