The use of artificial nerves for the repair of peripheral nerve defects is restricted by the limited sources of Schwann cells (SCs). Human mesenchymal stem cell (MSC)‑derived Schwann‑like cells are considered an alternative and desirable cell source. The aim of the present study was to establish a method of inducing directional differentiation of human umbilical cord blood (hUCB) MSCs into Schwann‑like cells. Cells isolated from hUCB were cultured in MesenCult complete medium, a specialized culture medium for MSCs, to expand hUCBMSCs. hUCBMSCs were purified by repeated changing of the medium, and they were identified by detection of the specific cell surface markers for MSCs. For differentiation of Schwann‑like cells from hUCBMSCs, the purified cells were sequentially cultured in DMEM/F12 medium with various additives. Differentiated Schwann‑like cells were identified by the detection of SC‑specific markers, including S100b, glial fibrillary acidic protein and P75, by immunocytochemisty, reverse transcription‑polymerase chain reaction and western blotting. The results demonstrated that the majority of the differentiated cells presented classical dipolar and fusiform SC morphology. Notably, a large proportion of these cells expressed the three SC markers. These results suggest that hUCBMSCs can undergo directional differentiation into Schwann‑like cells in vitro and may be an important source of SCs for the treatment of peripheral nerve defects with tissue‑engineered artificial nerves.