The use of donated red blood cells in transfusion is a well-established cellular therapy. However, problems including insufficient supply, transfusion-transmitted infections and the need for immunological matching hamper even in the best services. These issues may be eliminated by using pluripotent stem cells to generate universal donor group O, Rhesus D-negative red blood cells. Human embryonic stem cells can be maintained and expanded indefinitely and can, therefore, produce the very large cell numbers required for this application. Red blood cell production is also an attractive goal for pluripotent stem cell-derived therapeutics because it is a well-characterized single cell suspension, lacking nucleated cells and with a low expression of HLA molecules. Much progress has been made; however, a number of challenges remain including scale-up, clinical effectiveness and product safety.