Ligands of the Transforming Growth Factor type beta (TGFbeta) family exert multiple and sometimes opposite effects on most cell types in vivo depending on cellular context, which mainly includes the stage of the target cell, the local environment of this cell or niche, and the identity and the dosage of the ligand. Significant progress has been made in the molecular dissection of the regulation of the activity of the ligands and their intracellular signal transduction pathways, including via the canonical Smad pathway where Smads interact with many transcription factors. This knowledge together with results from functional studies within the embryology and stem cell research fields is giving us insight in the role of individual ligands and other components of this signaling system and where and how it regulates many properties of embryonic and adult stem/progenitor cells, which is anticipated to contribute to successful cell-based therapy in the future. We review and discuss recent progress on the effects of Nodal/Activin and Bone Morphogenetic Proteins (BMPs) and their canonical signaling in cells with stem cell properties. We focus on embryonic stem cells and their maintenance and pluripotency, and conversion into selected cell types of neuroectoderm, mesoderm and endoderm, on induced pluripotent cells and on neurogenic cells in the adult brain.