Embryonic stem (ES) cells are pluripotent cells derived from the inner cell mass cells of blastocyst with the potential to maintain an undifferentiated state indefinitely. Fully characterized ES cell lines express typical stem cell markers, possess high levels of telomerase activity, show normal karyotype and have the potential to differentiate into numerous cell types under in vitro and in vivo conditions. Therefore, ES cells are potentially valuable for the development of cell transplantation therapies for the treatment of various diseases in animals as well as in humans. However, important problems associated with ES cells from in vitro fertilized blastocysts particularly from humans must be resolved before taking up its therapeutic applications. Current techniques for directed differentiation into somatic cell populations remain inefficient and yield heterogeneous cell populations. This review therefore focuses on ES cells with respect to in vitro propagation and differentiation in basic cell and developmental biology for successful use of these cells in therapeutics.