OBJECTIVE: Generation of induced pluripotent stem (iPS) cells from human cord blood (CB)-derived unrestricted somatic stem cells and evaluation of their molecular signature and differentiation potential in comparison to human embryonic stem cells. MATERIALS AND METHODS: Unrestricted somatic stem cells isolated from human CB were reprogrammed to iPS cells using retroviral expression of the transcription factors OCT4, SOX2, KLF4, and C-MYC. The reprogrammed cells were analyzed morphologically, by quantitative reverse transcription polymerase chain reaction, genome-wide microRNA and methylation profiling, and gene expression microarrays, as well as in their pluripotency potential by in vivo teratoma formation in severe combined immunodeficient mice and in vitro differentiation. RESULTS: CB iPS cells are very similar to human embryonic stem cells morphologically, at their molecular signature, and in their differentiation potential. CONCLUSIONS: Human CB-derived unrestricted somatic stem cells offer an attractive source of cells for generation of iPS cells. Our findings open novel perspectives to generate human leukocyte antigen-matched pluripotent stem cell banks based on existing CB banks. Besides the obvious relevance of a second-generation CB iPS cell bank for pharmacological and toxicological testing, its application for autologous or allogenic regenerative cell transplantation appears feasible.