Stem cells hold promise to treat diseases currently unapproachable, including Parkinson's disease, liver disease and diabetes. Seminal research has demonstrated the ability of embryonic and adult stem cells to differentiate into clinically useful cell types in vitro and in vivo. More recently, the potential of fetal stem cells derived from extra-embryonic tissues has been investigated. Fetal stem cells are particularly appealing for clinical applications. The cells are readily isolated from tissues normally discarded at birth, avoiding ethical concerns that plague the isolation embryonic stem cells. Extra-embryonic tissues are large, potentially increasing the number of stem cells that can be extracted. Lastly, the generation and sequestration of cells that form extra-embryonic tissues occurs early in development and may endow resident stem cell populations with enhanced potency. In this review we summarize recent work examining the plasticity and clinical potential of fetal stem cells isolated from extra-embryonic tissues.