The cells present in amniotic fluid (AF) are currently used for prenatal diagnosis of fetal anomalies but are also a potential source of cells for cell therapy. To better characterize putative progenitor cell populations present in AF, we used culture conditions that support self-renewal to determine if these promoted the generation of stable cell lines from AF-derived cells (AFC). Cells isolated from E11.5 mouse were cultured on irradiated STO fibroblast feeder layers in human embryonic germ cell derivation conditions. The cultures grew multicellular epithelial colonies that could be repropagated from single cells. Reverse transcription semiquantitative polymerase chain reaction of established cell lines revealed that they belonged to the extraembryonic endoderm (ExEn) expressing high levels of Gata6, Gata4, Sox17, Foxa2 and Sox7 mRNA. Hierarchical clustering based on the whole transcriptome expression profile of the AFC lines (AFCL) shows significant correlation between transcription profiles of AFCL and blastocyst-derived XEN, an ExEn cell line. In vitro differentiation of AFCL results in the generation of cells expressing albumin and α-fetoprotein (AFP), while intramuscular injection of AFCL into immunodeficient mice produced AFP-positive tumors with primitive endodermal appearance. Hence, E11.5 mouse AF contains cells that efficiently produce XEN lines. These AF-derived XEN lines do not spontaneously differentiate into embryonic-type cells but are phenotypically stable and have the capacity for extensive expansion. The lack of requirement for reprogramming factors to turn AF-derived progenitor cells into stable cell lines capable of massive expansion together with the known ability of ExEn to contribute to embryonic tissue suggests that this cell type may be a candidate for banking for cell therapies.