Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT
                                   Pursuant to

                             Section 13 or 15(d) of

                       THE SECURITIES EXCHANGE ACT OF 1934

        Date of Report (Date of Earliest Event Reported): August 23, 2002


                                 STEMCELLS, INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                     0-19871                 94-3078125
----------------------------  ------------------------   ----------------------
(State or other jurisdiction  (Commission File Number)      (I.R.S. Employer
      of incorporation)                                  Identification Number)

                                2155 PORTER DRIVE
                           PALO ALTO, CALIFORNIA 94304

          (Address, of principal executive offices, including zip code)

                                 (650) 475-3100

               (Registrant's Telephone number including area code)



         On August 23, 2002, StemCells, Inc. (the "Company") entered into an
agreement pursuant to which the Company has agreed to sell 1,028,038 shares of
common stock to one institutional investor at an aggregate price of $1,100,000,
or approximately $1.07 per share.



         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                             STEMCELLS, INC.

                                             By: /s/ George Koshy
                                                 George Koshy
                                                 Controller and Acting Chief
                                                 Financial Officer

Date:  August 27, 2002

                                  EXHIBIT INDEX

10.1     Purchase Agreement dated as of August 23, 2002 between StemCells, Inc.
         and Triton West Group, Inc.

10.2     Escrow Agreement dated as of August 23, 2002 between StemCells, Inc.,
         Triton West Group, Inc. and Feldman Weinstein LLP.