Japanese scientists reported in the journal Science that they have created viable eggs using stem cells from adult mice.
The breakthrough raises the possibility that women who are unable to produce eggs naturally could have them created in a test tube from their own cells and then planted back into their body.
A team at Kyoto University harvested stem cells from mice and altered a number of genes to create cells very similar to the primordial germ cells that generate sperm in men and oocytes -- or eggs -- in women.
They then nurtured these with cells that would become ovaries and transplanted the mixture into living mice, where the cells matured into fully-grown oocytes.
They extracted the matured oocytes, fertilised them in vitro -- in a test tube -- and implanted them into surrogate mother mice.
The resulting mice pups were born healthy and were even able to reproduce once they matured.
Writing in the US journal Science, which published the findings, research leader professor Michinori Saito said the work provided a promising basis for hope in reproductive medicine.
"Our system serves as a robust foundation to investigate and further reconstitute female germline development in vitro, not only in mice, but also in other mammals, including humans," he said.
Saito cautioned that this was not a ready-made cure for people with fertility problems, adding that a lot of work remained.
"This achievement is expected to help us understand further the egg-producing mechanism and contribute to clarifying the causes of infertility," he told reporters.
"We intend to continue this research with monkeys and humans," he said.
Stem cells -- infant cells that develop into the specialised tissues of the body -- have sparked great excitement because they offer the chance of rebuilding organs damaged by disease or accident.
Until fairly recently, the only way to obtain stem cells was to harvest them from embryos, a process that is controversial because it necessitates the destruction of the embryo.
Religious conservatives, amongst others, have objected to research on human embryonic stem cells because they hold that the destruction of a foetus is wrong.
But pioneering work done in 2006 by Shinya Yamanaka, also at Kyoto University, succeeded in generating "induced pluripotent stem (iPS) cells", from skin tissue.
Like embryonic stemcells, iPS cells are also capable of developing into any cell in the body, but crucially their base material is readily available.
The findings on egg development published this week come just a year after scientists in Kyoto successfully coaxed sperm cells from mouse stem cells.
In that work, researchers took mice that were unable to produce normal sperm and injected them with the stem cell-derived primordial germ cells, or PGCs.
These PGCs "produced normal-looking sperm, which were then used to successfully fertilize eggs", the study said last year.