Background: Wharton's jelly-derived mesenchymal stem cells (WJ-MSCs) are a novel and promising strategy for tissue engineering because of their ability to differentiate into many cell types. We characterized the differentiation of WJ-MSCs into endometrial epithelial cell (EEC)-like and endometrial stromal cell (ESC)-like cells and assessed the effect of 17 beta-estradiol and 8-Br-cAMP on the differentiation system. Methods: WJ-MSCs were treated in two ways to differentiate into EEC-like and ESC-like cells respectively: cocultured with ESCs in control/differentiation medium (17 beta-estradiol, growth factors); and cultured in control/differentiation medium (8-Br-cAMP alone or 8-Br-cAMP plus 17 beta-estrogen and growth factors). Three signaling pathway inhibitors (SB203580, PD98059, H89) were used to investigate the mechanism of WJ-MSC differentiation into ESC-like cells. Immunofluorescence, western blot and flow cytometry analyses were used to analyze expression of epithelial markers and stromal cell markers. Enzyme-linked immunosorbent assays were used to test the production of secretory proteins associated with the differentiation of ESC-like cells. Results: 17 beta-estradiol at 1 mu M downregulated vimentin and CD13 and upregulated cytokeratin and CD9 proteins, promoting the differentiation of WJ-MSCs into EEC-like cells in the coculture system. 8-Br-cAMP at 0.5 mM upregulated vimentin and CD13 and downregulated CK and CD9, promoting the differentiation of WJ-MSCs into ESC-like cells. Prolactin (PRL) and insulin-like growth factor-binding protein 1 (IGFBP1) were upregulated and the protein kinase A (PKA) signaling pathway was activated, whereas extracellular signal-regulated (ERK) 1/2 and p38 mitogen-activated protein kinase (MAPK) were not affected. Conclusions: 17 beta-estradiol at 1 mu M is a good inducer for facilitating the differentiation of WJ-MSCs into EEC-like cells. 8-Br-cAMP plus estrogen and growth factors can induce the differentiation of WJ-MSCs into ESC-like cells. During the differentiation of WJ-MSCs into ESC-like cells, PRL and IGFBP1 were upregulated by the treatment and the PKA signaling pathway was activated, whereas ERK1/2 and p38 MAPK were not affected. These findings suggest a promising approach to the treatment of endometrial damage and other endometrial diseases and suggest new applications for WJ-MSCs in clinical practice.