The Embryo Protection Act, which came into force on 1 January, 1991, prohibits the production of an embryo “for any purpose other than the bringing about of a pregnancy.” Furthermore, it bans the use of an embryo “for a purpose not serving its preservation”. The Act makes it a punishable offence to cause “artificially a human embryo to develop with the same genetic information as another embryo, foetus or deceased person.” An embryo is defined in this context as “each totipotent cell removed from the embryo that is assumed to be able to develop into an individual under the appropriate conditions for that”. The Act thus bans the creation of embryos for research purposes. In the same way, the use of embryos for the production of stem cells, i.e. not for the purpose of their preservation, is also prohibited. The ban applies independently of whether these stem cells are totipotent or not and also extends to ‘surplus’ embryos.

Whether the Embryo Protection Act also prohibits "therapeutic cloning" or whether there is a regulatory gap is subject of a controversial debate amongst legal experts.

The import and utilisation of embryonic stem cells, which are not totipotent, are regulated in the Stem Cell Act adopted on 28 June, 2002. According to this Act, the import and utilisation of these cells are only admissible subject to specific preconditions: they must have been “derived before 1 January 2002 in the country of origin in accordance with relevant national legislation there;” and the embryos from which they were derived must “have been produced by medically-assisted in vitro fertilization in order to induce pregnancy.” Moreover, they must “definitely no longer (be) used for this purpose.” Apart from these stipulations the Act also lays down that “no compensation or other benefit in money’s worth may have been granted or promised” for the donation of these embryos. Research activities involving stem cells must serve “eminent research aims” and must “have been clarified as far as possible through in vitro models using animal cells or through animal experiments.” Lastly, there must be scientific reasons to believe that “the scientific knowledge to be obtained from the research project concerned cannot be expected to be gained by using cells other than embryonic stem cells.” The question whether the preconditions are fulfilled must be considered “by a competent agency in its portfolio determined by ordinance by the Federal Ministry for Health.” This agency will be advised by an independent, multi-disciplinary Central Ethics Commission for Stem Cell Research.

The corresponding regulation of 18 July 2002 states that the competent authority is the Robert Koch Institute (RKI).

The limited use made of the increased support available for stem cell research from EU funding is viewed as a special problem facing German researchers. Due to the restrictive legislation there have been only a few instances where German researchers are able to access EU support for stem cell research.

After long controversial discussions, the Parliament of the Federal Republic of Germany voted in favour of amending the German Stem Cell Act on 11 April, 2008. In the process, they agreed to postpone the cut-off date for importing embryonic stem cells from 1 January, 2002 to 1 May, 2007.