BACKGROUND: Haematopoiesis is sustained by haematopoietic (HSC) and mesenchymal stem cells (MSC). HSC are the precursors for blood cells, whereas marrow, stroma, bone, cartilage, muscle and connective tissues derive from MSC. The generation of MSC from umbilical cord blood (UCB) is possible, but with low and unpredictable success. Here we describe a novel, robust stroma-free dual cell culture system for long-term expansion of primitive UCB-derived MSC. METHODS AND FINDINGS: UCB-derived mononuclear cells (MNC) or selected CD34(+) cells were grown in liquid culture in the presence of serum and cytokines. Out of 32 different culture conditions that have been tested for the efficient expansion of HSC, we identified one condition (DMEM, pooled human AB serum, Flt-3 ligand, SCF, MGDF and IL-6; further denoted as D7) which, besides supporting HSC expansion, successfully enabled long-term expansion of stromal/MSC from 8 out of 8 UCB units (5 MNC-derived and 3 CD34(+) selected cells). Expanded MSC displayed a fibroblast-like morphology, expressed several stromal/MSC-related antigens (CD105, CD73, CD29, CD44, CD133 and Nestin) but were negative for haematopoietic cell markers (CD45, CD34 and CD14). MSC stemness phenotype and their differentiation capacity in vitro before and after high dilution were preserved throughout long-term culture. Even at passage 24 cells remained Nestin(+), CD133(+) and >95% were positive for CD105, CD73, CD29 and CD44 with the capacity to differentiate into mesodermal lineages. Similarly we show that UCB derived MSC express pluripotency stem cell markers despite differences in cell confluency and culture passages. Further, we generated MSC from peripheral blood (PB) MNC of 8 healthy volunteers. In all cases, the resulting MSC expressed MSC-related antigens and showed the capacity to form CFU-F colonies. CONCLUSIONS: This novel stroma-free liquid culture overcomes the existing limitation in obtaining MSC from UCB and PB enabling so far unmet therapeutic applications, which might substantially affect clinical practice.