The umbilical cord develops from and contains remnants of the yolk sac and allantois. It forms by the fifth week of development, replacing the yolk sac as the source of nutrients for the embryo. The cord is not directly connected to the mother's circulatory system, but instead joins the placenta, which transfers materials to and from the maternal blood without allowing direct mixing. The length of the umbilical cord is approximately equal to the crown-rump length of the fetus throughout pregnancy. The umbilical cord in a full term neonate is usually about 50 centimeters (20 in) long and about 2 centimeters (0.75 in) in diameter. This diameter decreases rapidly within the placenta. The fully patent umbilical artery has two main layers: an outer layer consisting of circularly arranged smooth muscle cells and an inner layer which shows rather irregularly and loosely arranged cells embedded in abundant ground substance staining metachromatic. The smooth muscle cells of the layer are rather poorly differentiated, contain only a few tiny myofilaments and are thereby unlikely to contribute actively to the process of post-natal closure.

The umbilical cord lining is a good source of mesenchymal and epithelial stem cells. Their advantages include a better harvesting, and multiplication, and immunosuppressive properties that define their potential for use in transplantations. Their use would also overcome the ethical objections raised by the use of embryonic stem cells.