Amniotic epithelium is derived from the epiblast by approx 8 d after fertilization. Other parts of the placenta are derived from extraembryonic tissue. In addition to this developmental difference, amniotic epithelial (AE) cells are known to have unique characteristics, such as low level expression of major histocompatibility complex antigens, and a less restricted differentiation potential. The differentiation of the AE cells to the neural lineage is well documented. Recently, we reported that AE cells from term placenta express several stem cell surface markers that are commonly found on pluripotent stem cells such as embryonic stem cells, and that in culture, AE cells differentiate into cell types from all three germ layers. In this review, we describe the unique characteristics of the AE stem cells and summarize previous work concerning the stem cell nature of cells from amnion.