Undifferentiated cells have been identified in the prenatal blastocyst, inner cell mass, and gonadal ridges of rodents and primates, including humans. After isolation these cells express molecular and immunological markers for embryonic cells, capabilities for extended self‐renewal, and telomerase activity. When allowed to differentiate, embryonic stem cells express phenotypic markers for tissues of ectodermal, mesodermal, and endodermal origin. When implanted in vivo, undifferentiated noninduced embryonic stem cells formed teratomas. In this report we describe a cell clone isolated from postnatal rat skeletal muscle and derived by repetitive single‐cell clonogenic analysis. In the undifferentiated state it consists of very small cells having a high ratio of nucleus to cytoplasm. The clone expresses molecular and immunological markers for embryonic stem cells. It exhibits telomerase activity, which is consistent with its extended capability for self‐renewal. When induced to differentiate, it expressed phenotypic markers for tissues of ectodermal, mesodermal, and endodermal origin. The clone was designated as a postnatal pluripotent epiblastic‐like stem cell (PPELSC). The undifferentiated clone was transfected with a genomic marker and assayed for alterations in stem cell characteristics. No alterations were noted. The labeled clone, when implanted into heart after injury, incorporated into myocardial tissues undergoing repair. The labeled clone was subjected to directed lineage induction in vitro, resulting in the formation of islet‐like structures (ILSs) that secreted insulin in response to a glucose challenge. This study suggests that embryonic‐like stem cells are retained within postnatal mammals and have the potential for use in gene therapy and tissue engineering. Anat Rec Part A 277A:178–203, 2004. © 2004 Wiley‐Liss, Inc.