Umbilical cord blood transplantation (UCBT) has been performed in the clinic for over 30 years. The biological and immunological characteristics of umbilical cord blood (UCB) have been re-recognized in recent years. UCB, previously considered medical waste, is rich in hematopoietic stem cells (HSCs), which are naïve and more energetic and more easily expanded than other stem cells. UCB has been identified as a reliable source of HSCs for allogeneic hematopoietic stem cell transplantation (allo-HSCT). UCBT has several advantages over other methods, including no harm to mothers and donors, an off-the-shelf product for urgent use, less stringent HLA match, lower incidence and severity of chronic graft-vs-host disease (GVHD), and probably a stronger graft-vs-leukemia effect, especially for minimal residual disease-positive patients before transplant. Recent studies have shown that the outcome of UCBT has been improved and is comparable to other types of allo-HSCT. Currently, UCBT is widely used in malignant, nonmalignant, hematological, congenital and metabolic diseases. The number of UCB banks and transplantation procedures increased exponentially before 2013. However, the number of UCBTs increased steadily in Asia and China but decreased in the United States and Europe year-on-year from 2013 to 2019. In this review, we focus on the development of UCBT over the past 30 years, the challenges it faces and the strategies for future improvement, including increasing UCB numbers, cord blood unit selection, conditioning regimens and GVHD prophylaxis for UCBT, and management of complications of UCBT.