Stem cells possess the ability to self-renew and generate multiple cell types of the tissues in which they reside. Several studies have reported transdifferentiation events between different somatic stem cells. These properties have created tremendous excitement about the prospect of using stem cells from easily accessible sources for tissue engineering. However, recently, the plasticity of stem cells has met with several strong challenges. In this meeting review, we will discuss issues surrounding reports of transdifferentiation, the molecular mechanisms that govern stem cell states, and progress toward putting stem cells to use.