Umbilical cord blood (UCB) has recently represented another rich source for hematopoietic stem cells (HSCs). Recent clinical studies have shown that UCB stem cells can potentially be used in place of HSCs from bone marrow as well as in basic research in regenerative medicine. This article will describe the methods for isolation and characterization of HSCs from UCB. UCB were obtained from umbilical vessels at the time of delivery. The HSCs were isolated from UCB using a density-gradient centrifugation method, CD34-immunomagnetic separation, and finally fluorescent-activated cell sorting (FACS). Functional assays were evaluated for the ability of multipotent progenitors to differentiate to lineage-specific committed cells and heterogeneous hierarchy of pluripotent cells. Approximately 1% of CD34+ cells were isolated and sorted from mononucleated cells. Functional assays revealed that the CD34+ subpopulation gave rise to several hematopoietic cell lineages including CFU-E, BFU-E, CFU-G, CFU-M, CFU-GM, and CFU-GEMM. These cells also maintained their stemness as evaluated by primitive long-term culture initiating cells (LTC-IC). The basic methods in HSC isolation and characterization employing gradient isolation, CD34-immunomagnetic separation, FACS, and functional assays are important in the area of stem cell investigation and applications.