Postnatal stem cells are present in many adult tissues, and are thought to ensure homoeostasis by replacing functionally declining cells by newly differentiated ones. Postnatal stem cells used as such or after in vitro manipulation hold out strong hopes for reconstructive therapies. For instance, the grafting of native haematopoietic stem cells (HSC) restores haematopoiesis in genetically deficient individuals or in lethally conditioned leukaemic patients, and systemic injection of in vitro amplified mesenchymal stem cells (MSC) induces recovery of bone growth in patients with osteogenesis imperfecta. Moreover, cells differentiated in vitro from postnatal stem cells exhibiting a specific function can also be used for cell therapy. Myeloid dendritic cells (DC) derived from cultures of HSC may induce tumour-specific cytotoxic T lymphocytes to eradicate the tumour via antigen recognition. In addition, long-lived MSC has been engineered to secrete specific proteins coded by a transgene and used as a source of therapeutic molecules in vivo. All these approaches require large quantities of cells that cannot be obtained (with the exception of HSC) directly from the donor. In vitro procedures allowing the production of therapeutic cells from postnatal stem cells are needed and are at present under development. Below we discuss the rationale and methods currently available for generation of therapeutic cells derived from haematopoietic and mesenchymal stem cells.