Abstract Conventionally, mesenchymal stem cells (MSC) are generated by plating cells from bone marrow (BM) or other sources into culture flasks and selecting plastic-adherent cells with fibroblastoid morphology. These cells express CD9, CD10, CD13, CD73, CD105, CD166, and other markers but show only a weak or no expression of the embryonic markers stage-specific embryonic antigen-4 (SSEA-4), Oct-4 and nanog-3. Using a novel protocol we prepared MSC from BM and non-amniotic placenta (PL) by culture of Ficoll-selected cells in gelatin-coated flasks in the presence of a serum-free, basic fibroblast growth factor (b-FGF)-containing medium that was originally designed for the expansion of human embryonic stem cells (ESC). MSC generated in gelatin-coated flasks in the presence of ESC medium revealed a four-to fivefold higher proliferation rate than conventionally prepared MSC which were grown in uncoated flasks in serum-containing medium. In contrast, the colony forming unit fibroblast number was only 1.5- to twofold increased in PL-MSC and not affected in BM-MSC. PL-MSC grown in ESC medium showed an increased surface expression of SSEA-4 and frizzled-9 (FZD-9), an increased Oct-4 and nestin mRNA expression, and an induced expression of nanog-3. BM-MSC showed an induced expression of FZD-9, nanog-3, and Oct-4. In contrast to PL-MSC, only BM-MSC expressed the MSC-specific W8B2 antigen. When cultured under appropriate conditions, these MSC gave rise to functional adipocytes and osteoblast-like cells (mesoderm), glucagon and insulin expressing pancreatic-like cells (endoderm), as well as cells expressing the neuronal markers neuron-specific enolase, glutamic acid decarboxylase-67 (GAD), or class III β-tubulin, and the astrocyte marker glial fibrillary acidic protein (ectoderm). In conclusion, using a novel protocol we demonstrate that adult BM-and neonatal PL-derived MSC can be induced to express high levels of FZD-9, Oct-4, nanog-3, and nestin and are able of multi-lineage differentiation.