The human umbilical cord (UC) is an attractive source of mesenchymal stem cells (MSCs) with unique advantages over other MSC sources. They have been isolated from different compartments of the UC but there has been no rigorous comparison to identify the compartment with the best clinical utility. We compared the histology, fresh and cultured cell numbers, morphology, proliferation, viability, stemness characteristics and differentiation potential of cells from the amnion (AM), subamnion (SA), perivascular (PV), Wharton’s jelly (WJ) and mixed cord (MC) of five UCs. The WJ occupied the largest area in the UC from which 4.61 ± 0.57 x 10 6 /cm fresh cells could be isolated without culture compared to AM, SA, PV and MC that required culture. The WJ and PV had significantly lesser CD40+ non-stem cell contaminants (26-27%) compared to SA, AM and MC (51-70%). Cells from all compartments were proliferative, expressed the typical MSC-CD, HLA, and ESC markers, telomerase, had normal karyotypes and differentiated into adipocyte, chondrocyte and osteocyte lineages. The cells from WJ showed significantly greater CD24+ and CD108+ numbers and fluorescence intensities that discriminate between MSCs and non-stem cell mesenchymal cells, were negative for the fibroblast-specific and activating-proteins (FSP, FAP) and showed greater osteogenic and chondrogenic differentiation potential compared to AM, SA, PV and MC. Cells from the WJ offer the best clinical utility as (i) they have less non-stem cell contaminants (ii) can be generated in large numbers with minimal culture avoiding changes in phenotype, (iii) their derivation is quick and easy to standardize, (iv) they are rich in stemness characteristics and (v) have high differentiation potential. Our results show that when isolating MSCs from the UC, the WJ should be the preferred compartment, and a standardized method of derivation must be used so as to make meaningful comparisons of data between research groups.