In the promising field of regenerative medicine, human perinatal stem cells are of great interest as potential stem cells with clinical applications. Perinatal stem cells could be isolated from normally discarded human placentae, which are an ideal cell source in terms of availability, the fewer number of ethical concerns, less DNA damage, and so on. Numerous studies have demonstrated that some of the placenta-derived cells possess stem cell characteristics like pluripotent differentiation ability, particularly in amniotic epithelial (AE) cells. Term human amniotic epithelium contains a relatively large number of stem cell marker-positive cells as an adult stem cell source. In this review, we introduce a model theory of why so many AE cells possess stem cell characteristics. We also describe previous work concerning the therapeutic applications and discuss the pluripotency of the AE cells and potential pitfalls for amnion-derived stem cell research.