Cord blood (CB) is used increasingly as a source of hematopoietic stem cells because of a lower risk of acute and chronic graft-versus-host disease (GVHD). However, there is some concern regarding the ability to adequately reconstitute host immune response due to the immaturity and naivety of CB T cells. This study was designed to evaluate T-cell reconstitution using combined approaches of phenotyping, analysis of αβ T-cell receptor (TCR) diversity, and assessment of ex vivo thymic function by measuring TCR rearrangement excision circles (TRECs). Ten patients who underwent CB transplantation for high-risk hematologic disorders were compared to a reference group of 19 age- and GVHD-matched patients who underwent transplantation with non-T cell-depleted bone marrow from an HLA-identical sibling donor. TREC values correlated with the relative number of naive T cells and with TCR repertoire polyclonality. During the first year after transplantation, TCR repertoires were highly abnormal and TREC values low in both groups. Notably, 2 years after transplantation onward TREC values as well as TCR diversity were higher in CB recipients than in recipients of bone marrow transplants. These data indicate an efficient thymic regeneration pathway from CB lymphoid progenitors despite the low number of cells infused compared to bone marrow, arguing for a complete clinical immune recovery after CB transplantation.