Umbilical cord blood contains a population of non-hematopoietic multipotent stem cells that are capable of neuronal differentiation in-vitro. These cells have shown great potential as a therapeutic tool for central nervous system diseases and disorders. However whether these cells are able to produce neurons with similar developmental and functional characteristics to indigenous neurons within the brain remains poorly investigated. In this study, we used purified umbilical cord blood non-hematopoietic stem cells to produced GABAergic neurons with similar developmental and functional characteristics to cortical GABAergic neurons. We analyzed the expression of transcription factors MASH1, DLX1 and DLX2 throughout the 24 days of a sequential neuronal induction protocol and found that their expression patterns resembled those reported in the developing human cortex. The derived neurons also expressed components of GABAergic neurotransmission including GABA regulatory enzymes, GABA receptor subunits and GABA transporters. Thus we have demonstrated that umbilical cord blood stem cells are capable of producing cortical-like GABAergic neurons in vitro. This highlights the potential of umbilical cord blood stem cells as a therapeutic tool for neural injuries and disorders.