Stem cells have the remarkable potential to develop into many different cell types in the body during early life and growth. In addition, in many tissues they serve as a sort of internal repair system, dividing essentially without limit to replenish other cells. When a stem cell divides, each new cell has the potential either to remain a stem cell or become another type of cell with a more specialized function, such as a muscle cell, a red blood cell, or a brain cell.
Stem cells are distinguished from other cell types by two important characteristics. First, they are unspecialized cells capable of renewing themselves through cell division. Second, under certain physiologic or experimental conditions, they can be induced to become tissue- or organ-specific cells with special functions.
Human embryonic stem cells (hESCs) are a type of pluripotent stem cell, meaning they are capable of giving rise to all of the various cell types of the body, derived from early-stage human embryos, up to and including the blastocyst stage. hESCs are capable of dividing without differentiating for a prolonged period in culture and are known to develop into cells and tissues of the three primary germ layers. Another source of pluripotent stem cells comes from induced pluripotent stem cells (iPSCs). iPSCs are adult cells that have been genetically reprogrammed to an embryonic stem cell–like state by being forced to express genes and factors important for maintaining the defining properties of embryonic stem cells. Although these cells meet the defining criteria for pluripotent stem cells, it is not known if iPSCs and embryonic stem cells differ in clinically significant ways.
The above information was adapted from: https://stemcells.nih.gov/info/basics.htm