Stem cells have traditionally been characterized as either embryonic (pluripotent) or tissue-specific (multipotent). Thus, tissue-specific stem cells generate the cell types comprising a particular tissue in embryos and, in some cases, adults. A recent series of studies, however, has challenged the notion of lineage restriction in multipotent stem cells. These experiments have been interpreted as evidence that stem cells from one tissue can be induced to differentiate into cells of other organs, either in vitro or after transplantation in vivo. This paper reviews the current evidence for stem cell plasticity. Some of the potential caveats to the current work are also discussed and, finally, the potential underlying mechanisms of stem cell plasticity are examined.