Key ethical issues arise in association with the conduct of stem cell research by research institutions in the United States. These ethical issues, summarized in detail, receive no adequate translation into federal laws or regulations, also described in this article. U.S. Federal policy takes a passive approach to these ethical issues, translating them simply into limitations on taxpayer funding, and foregoes scientific and ethical leadership while protecting intellectual property interests through a laissez faire approach to stem cell patents and licenses. (...) Those patents and licenses, far from being scientifically and ethically neutral in effect, virtually prohibit commercially sponsored research that could otherwise be a realistic alternative to the federal funding gap. The lack of federal funding and related data-sharing principles, combined with the effect of U.S. patent policy, the lack of key agency guidance, and the proliferation of divergent state laws arising from the lack of Federal leadership, significantly impede ethical stem cell research in the United States, without coherently supporting any consensus ethical vision. Research institutions must themselves implement steps, described in the article, to integrate addressing ethical review with the many legal compliance issues U.S. federal and state laws create. (shrink)