The early concepts concerning hematopoietic and epithelial stem cells that were derived from kinetic studies have been greatly enhanced by new information about a range of other properties of somatic and embryonic stem cells. Firstly, the stem and amplifying pattern characteristically established by epithelial lineages has been found to represent an intrinsic pattern that is generated by somatic epithelial stem cells without the need for additional environmental information. Secondly, it is now apparent that somatic epithelial stem cells are plastic and can be directed into a range of new pathways of differentiation by heterotypic interactions. The mechanisms of this plasticity need to be reconciled with the normally stable commitment of these cells to production only of progeny entering a tightly restricted range of phenotypic pathways. The present review discusses the intrinsic properties of epithelial stem cells and how they may be acted upon by connective tissues to generate a wide range of phenotypically different epithelial structures.