Stem cell systems represent an effective and powerful approach for tissue development and regeneration of diverse tissue types. Common and defining features of these exceptional cells are the capacity for self-renewal and the potential for differentiation into multiple mature cell types. Recently, surprising new observations have indicated that stem cells isolated from one adult tissue can also give rise to mature cells of other cell lineages, irrespective of classical germ layer designations. This discovery has resulted in quantum leaps in both scientific knowledge and the potential applications of stem cells. The new findings contradict central dogmas of commitment and differentiation of stem and progenitor cells. However, the true potential of somatic stem cells is just emerging and the new findings have to be defined more fully and integrated into a unifying model of stem cell potential and behavior. Here we analyze the developmental potential of hematopoietic stem cells of mouse and man following their injection into the murine preimplantation blastocyst, an environment that allows the development of all cell lineages. In addition, we discuss the emerging lines of evidence of the developmental plasticity of hematopoietic and other somatic stem cells and consider how cellular memory of transcriptional states is established and may be potentially involved in this phenomenon.