Because of their small size and density, umbilical cord blood (UCB)-derived very small embryonic/epiblast-like stem cells (VSELs) are usually lost at various steps of UCB preparation. Accordingly, we noticed that a significant number of these cells, which are smaller than erythrocytes, are lost during gradient centrifugation over Ficoll-Paque as well as during routine volume depletion of UCB units before freezing. To preserve these cells in final UCB preparations, we propose a relatively short and economical three-step isolation protocol that allows recovery of approximately 60% of the initial number of Lin−/CD45−/CD133+ UCB-VSELs present in freshly harvested UCB units. In this novel approach (i) UCB is lysed in a hypotonic ammonium chloride solution to deplete erythrocytes; (ii) CD133+ including VSELs cells are enriched by employing immunomagnetic beads; and subsequently (iii) Lin−/CD45−/CD133+ cells are sorted by fluorescence-activated cell sorting. The whole isolation procedure takes approximately 2–3 h per UCB unit and isolated cells are highly enriched for an Oct-4+ and SSEA-4+ population of small Lin−/CD45−/CD133+ cells.