Female reproductive potential is limited in the majority of species due to oocyte depletion. Because functional human oocytes are restricted in number and accessibility, a robust system to differentiate oocytes from stem cells would enable a thorough investigation of the genetic, epigenetic, and environmental factors affecting human oocyte development. Also, the differentiation of functional oocytes from stem cells may permit the success of human somatic cell nuclear transfer for reprogramming studies and for the production of patient-specific embryonic stem cells (ESCs). Thus, ESC-derived oocytes could ultimately help to restore fertility in women. Here, we review endogenous and ESC-derived oocyte development, and we discuss the potential and challenges for differentiating functional oocytes from ESCs.