Cell transplantation and tissue regeneration studies indicate a surprisingly broad developmental potential for lineage-committed hematopoietic stem cells (HSCs). Under these conditions HSCs transition into myocytes, neurons, hepatocytes or other types of nonhematopoietic effector cells. Equally impressive is the progression of committed neuronal stem cells (NSCs) to functional blood elements. Although critical cell-of-origin issues remain unresolved, the possibility of lineage switching is strengthened by a few well-controlled examples of cell-type conversion. At the molecular level, switching probably initiates from environmental signals that induce epigenetic modifications, resulting in changes in chromatin configuration. In turn, these changes affect patterns of gene expression that mediate divergent developmental programs. This review examines recent findings in nuclear reprogramming and cell fusion as potential causative mechanisms for transdifferentiation during normal and malignant hematopoiesis.