The early human embryo contains many stem cells. Stem cells are undifferentiated themselves, but he the potential to develop into many different types of specialised cells. The very earliest cells in an embryo are known as totipotent – they he the potential to develop into any one of the different types of cells needed to make a complete human being. By the time the embryo is four or five days old and has formed a hollow ball of cells the stem cells are slightly less flexible. They are pluripotent – they can form almost all of the cell types needed in future, but not tissue such as the placenta. The adult stem cells found in adult human beings are only multipotent – they are partly differentiated already and can only form a relatively limited number of cell types.
The process by which an unspecialised stem cell becomes a cell with a specific structure and function is known as differentiation. Differentiation is genetically controlled: an undifferentiated cell can potentially express (produce proteins from) all the genes in its DNA. As the cell becomes differentiated, some genes are switched off and can no longer be expressed. The specific pattern of which genes are switched on and which are switched off produces a differentiated cell type with a specific function. The proteins that cell is able to produce relate to its function: a differentiated cell doesn’t produce proteins that it doesn’t need.
A cell can be partly differentiated but can still differentiate further to form other cells. Think of cell differentiation as a pyramid: as you go down the pyramid cells become more specialised and less able to generate other cells, with fully differentiated cells with a specific function and unable to form any other types of cell at the bottom.