Human disease results from loss of organ function. Whether the tissue failure results from infarction, infection, trauma, or congenital malfunction, the ideal treatment would be regrowth of a new organ or tissue to replace that which is lost or injured. Stem cell research holds the promise of developing such treatments for many life-threatening and debilitating diseases. Stem cells come in two basic types, unrestricted and restricted. Embryonic stem cells are totipotent, able to differentiate into all cell types characteristic of the species they are taken from. Adult stem cells are thought to be more restricted in their potential, functioning as the body’s natural source of cells for tissue homeostasis and repair. Although it seems unlikely that adult stem cells harvested from one tissue might be reprogrammed to take on the characteristics of a different cell type, several tantalizing results have encouraged researchers to consider this possibility. Before scientists can begin to define the limits of adult stem cell plasticity, they need to understand the signals that instruct multipotent cells to self-renew and differentiate within the lineages of their resident tissues. Skin is an excellent model system in which to explore these fundamental mechanisms, because skin keratinocytes are easily accessible and are one of the few adult stem cell types that can be maintained and propagated in vitro. These cells have already been engrafted long term to replace damaged epidermis on burn patients. Now skin biologists have begun to identify some of the key steps involved in generating a functional tissue from multipotent stem cells. The totipotency of embryonic stem (ES) cells, coupled with their ability to respond to morphogenic signals and differentiate into any desired cell fate, makes them an attractive starting place for cell replacement therapies. If stem cells derived from adult human tissues offer similar promise, this would circumvent many of the ethical and technical issues that cloud the ES cell field (Ferrari et al. 1998; Gussoni et al. 1999; Krause et al. 2001; Peterson 2002). In the past few years, researchers have claimed that mouse brain stem cells injected into irradiated recipient mice contribute to the recovering hematopoietic system (Bjornson et al. 1999), and conversely, some transplanted bone marrow stem cells reportedly differentiate into brain cells (Mezey et al. 2000). Even in human, female cancer patients receiving bone marrow transplants from male donors were found to have differentiated cells with male chromosomes in their cerebella, leading scientists to posit that transdifferentiation of donor hematopoietic stem cells may occur in brain tissue (Weimann et al. 2003). Although enticing, the seemingly extraordinary plasticity of adult stem cells has been met by critics who suggest that the reported transdifferentiation events may have arisen from fusion of stem cells with existing differentiated cells, or from injections of heterogeneous populations of incompletely characterized stem cells, rather than true reprogramming (Terada et al. 2002; Wagers et al. 2002; Ying et al. 2002). Advocates counter that tissue injury, which is present in clinical situations requiring treatment, increases the rate at which bone-marrow-derived stem cells transdifferentiate into other cell types such as muscle and neurons (Jiang et al. 2002; LaBarge and Blau 2002). As the controversy over stem cell plasticity continues, the potential for cell fusion or deregulated transdifferentiation raises other concerns, as cancerous cells may derive from somatic stem cells (Reya et al. 2001). The contention in the adult stem cell field reflects how little is known in a rapidly moving field whose potential impact on clinical medicine is …