Background: Mesenchymal stem cells (MSCs) are an excellent candidate for cell therapy because their isolation is straightforward, they can be bio-preserved with minimal loss of potency, they are able to self-renew with a high proliferative capacity, and no immunogenic reactions are observed with their transplants. Bone marrow (BM) was the first source reported to contain MSCs and most of the knowledge concerning MSCs comes from BM studies. However, MSCs from BM decrease significantly with age and their isolation is invasive and can cause infection, bleeding, and chronic pain thus the identification of new MSCs sources that are easily obtainable is of utmost importance. Several studies have shown that MSCs could be isolated from umbilical cord blood (UCB) units. However, the presence of MSCs in UCB is still controversial. Aim of Work: This study aims at isolation of MSCs from UCB, characterizing them, and inducing differentiation of these cells into osteogenic lineage under in vitro culture conditions. Methodology: Mononuclear cells were first isolated from UCB by density gradient separation, and then they were expanded in vitro and characterized by flow cytometry, and real-time PCR. Finally, UCB-MSCs were induced to differentiate toward osteogenic lineage and this differentiation was assessed by evaluation of ALP activity and mineralized matrix formation. Results: MSCs were successfully isolated from UCB samples. The cells exhibited a fibroblast-like morphology and they expressed high levels of CD44, CD90, CD73, CD105, and CD105/90, whereas they were negative for CD34, CD45, and HLA-DR. Upon genetic expression analysis, UCB-MSCs showed expression of transcripts for Oct4, Sox2, PDGFRa, and Runx1. UCB-derived MSCs were also able to differentiate into osteoblasts when cultured in vitro. Conclusion: Our data showed that UCB can be an alternative less invasive easily attainable source for MSCs which have high expansion and osteogenic differentiation potentials.