In this study, we describe the isolation and characterization of epithelial stem-like cells from the swine umbilical cord and their susceptibility to influenza virus infection. Swine umbilical cord epithelial stem cells (SUCECs) expressed stem cell and pluripotency associated markers such as SSEA-1, SSEA-4, TRA 1–60 and TRA 1–81 and Oct4. Morphologically, cells displayed polygonal morphology and were found to express epithelial markers; pancytokeratin, cytokeratin-18 and occludin; mesenchymal cell markers CD44, CD90 and haematopoietic cell marker CD45 were not detected on these cells. The cells had extensive proliferation and self- renewal properties. The cells also possessed immunomodulatory activity and inhibited the proliferation of T cells. Also, higher levels of anti-inflammatory cytokine IL-10 were detected in SUCEC-T cell co-cultures. The cells were multipotent and differentiated into lung epithelial cells when cultured in epithelial differentiation media. We also examined if SUCECs are susceptible to infection with influenza virus. SUCECs expressed sialic acid receptors, used by influenza virus for binding to cells. The 2009 pandemic influenza virus and swine influenza virus replicated in these cells. SUCECs due to their differentiation and immunoregulatory properties will be useful as cellular therapy in a pig model for human diseases. Additionally, our data indicate that influenza virus can infect SUCECs and may transmit influenza virus from mother to fetus through umbilical cord and transplantation of influenza virus-infected stem cells may transmit infection to recipients. Therefore, we propose that umbilical cord cells, in addition to other agents, should also be tested for influenza virus before cryopreservation for future use as a cell therapy for disease conditions.