Adult stem cells are narrowly focused on replenishing specific types of tissue that wear out over a lifetime, such as skin, hair and blood. Researchers around the world are looking for ways to expand the cells' range of capabilities.

Amniotic-fluid stem cells, which are sloughed off by the fetus, are "a different kind of a stem cell," Atala said. "It's not as early as a human embryonic stem cell and it's not as late as the adult stem cells."

Scientists surmised more than a decade ago that amniotic fluid would contain those cells and identified some after several years of searching.

Atala and his colleagues set out to determine just how plentiful and flexible the stem cells might be.

The researchers studied 10-milliliter samples of fluid extracted from pregnant women who had amniocentesis to screen fetuses for genetic abnormalities. Those tests are commonly performed early in the second trimester.

Of the myriad cells that make up amniotic fluid, the researchers found that about 1% had a surface marker that is a hallmark of embryonic stem cells. They took it as a signal that these cells might be pluripotent.

The researchers from Wake Forest and Harvard Medical School biochemically prompted the cells to transform into all of the main categories of embryonic tissue.

A key test was to see whether the cells functioned like normal cells.

Stem cells induced to become neural cells were able to secrete a neurotransmitter when stimulated by potassium ions, mimicking conditions inside the brain, the researchers reported. They also induced stem cells to develop into liver cells that were able to secrete urea, a compound produced in the liver.

Other stem cells that had been coaxed into becoming osteoblasts, which build up bone, were implanted in mice. The cells formed a tissue that was more dense than normal mouse bone, he said.

"You may be able to obtain the same medical benefits — and cure the same diseases — without the risks or controversy associated with embryonic stem cells," said Lanza of Advanced Cell Technology. "It's just what the doctor ordered."

The cells were easy to grow and maintain, and they did not form the tumors — jumbles of tissue that can include bits of fat, hair and teeth — that are common with embryonic stem cells, the researchers said.

"That's one of the biggest issues the FDA will be concerned about when it comes time to approve stem-cell-based therapies," said the University of Pittsburgh's Russell.

But Larry Goldstein, a professor of cellular and molecular medicine at UC San Diego who studies embryonic stem cells, said the absence of tumors might signal a limitation of amniotic stem cells. "It makes me wonder how pluripotent they are," said Goldstein, who was not involved in the study.

Though the cells might prove useful in some circumstances, Goldstein said, they aren't a substitute for embryonic stem cells. "They built a screwdriver here, but I need a wrench," he said.

The technology described in the study is owned by Wake Forest University Baptist Medical Center and controlled by Plureon Corp., a biotech start-up in Winston-Salem.

Atala serves on Plureon's board and directs its scientific advisory panel.

The researchers, whose study was primarily funded by the Joshua Frase Foundation and the Crown Foundation of the March of Dimes, reported they had found similar stem cells in samples of chorionic villi — a part of the placenta sometimes biopsied as an alternative to amniocentesis — and of placentas obtained after birth.

Stem cells could one day be routinely extracted from placentas and stored in case they are needed to create genetically matched tissues during a baby's lifetime, Atala said. Because the cells would be a perfect match, the transplanted tissues would not be rejected.

Amniotic-fluid stem cells could also be used to build a stem cell bank. It would take about 100,000 cell samples to obtain enough genetic diversity to cover 99% of the U.S. population, he said.