The amnion is the inner of two membranes surrounding the fetus. That it arises from embryonic epiblast cells prior to gastrulation suggests that it may retain a reservoir of stem cells throughout pregnancy. We found that human amniotic epithelial cells (hAECs) harvested from term-delivered fetal membranes express mRNA and proteins present in human embryonic stem cells (hESCs), including POU domain, class 5, transcription factor 1; Nanog homeobox; SRY-box 2; and stage-specific embryonic antigen-4. In keeping with possible stem cell-like activity, hAECs were also clonogenic, and primary hAEC cultures could be induced to differentiate into cardiomyocytic, myocytic, osteocytic, adipocytic (mesodermal), pancreatic, hepatic (endodermal), neural, and astrocytic (neuroectodermal) cells in vitro, as defined by phenotypic, mRNA expression, immunocytochemical, and/or ultrastructural characteristics. However, unlike hESCs, hAECs did not form teratomas upon transplantation into severe combined immunodeficiency mice testes. Last, using flow cytometry we have shown that only a very small proportion of primary hAECs contain class IA and class II human leukocyte antigens (HLAs), consistent with a low risk of tissue rejection. However, following differentiation into hepatic and pancreatic lineages, significant proportions of cells contained class IA, but not class II, HLAs. These observations suggest that the term amnion, an abundant and easily accessible tissue, may be a useful source of multipotent stem cells that possess a degree of immune privilege.