Induced pluripotent stem cells (iPSC) provide an invaluable resource for regenerative medicine as they allow the generation of patient-specific progenitors with potential value for cell therapy. However, in many instances, an off-the-shelf approach is desirable, such as for cell therapy of acute conditions or when the patient's somatic cells are altered as a consequence of a chronic disease or aging. Cord blood (CB) stem cells appear ideally suited for this purpose as they are young cells expected to carry minimal somatic mutations and possess the immunological immaturity of newborn cells; additionally, several hundred thousand immunotyped CB units are readily available through a worldwide network of CB banks. Here we present a detailed protocol for the derivation of CB stem cells and how they can be reprogrammed to pluripotency by retroviral transduction with only two factors (OCT4 and SOX2) in 2 weeks and without the need for additional chemical compounds.