Stem cells have been recognized as a potential tool for the development of innovative therapeutic strategies. There are in general two types of stem cells, embryonic and adult stem cells. While embryonic stem cell therapy has been riddled with problems of allogeneic rejection and ethical concerns, adult stem cells have long been used in the treatment of hematological malignancies. With the recognition of additional, potentially therapeutic characteristics, bone marrow–derived stem cells have become a tool in regenerative medicine. The bone marrow is an ideal source of stem cells because it is easily accessible and harbors two types of stem cells. Hematopoietic stem cells give rise to all blood cell types and have been shown to exhibit plasticity, while multipotent marrow stromal cells are the source of osteocytes, chondrocytes, and fat cells and have been shown to support and generate a large number of different cell types. This review describes the general characteristics of these stem cell populations and their current and potential future applications in regenerative medicine. Developmental Dynamics 236:3321–3331, 2007. © 2007 Wiley-Liss, Inc.