Asymmetric cell division is an important and conserved strategy in the generation of cellular diversity during animal development. Many of our insights into the underlying mechanisms of asymmetric cell division have been gained from Drosophila, including the establishment of polarity, orientation of mitotic spindles and segregation of cell fate determinants. Recent studies are also beginning to reveal the connection between the misregulation of asymmetric cell division and cancer. What we are learning from Drosophila as a model system has implication both for stem cell biology and also cancer research.