Stem cells harbor significant potential for regenerative medicine as well as basic and clinical translational research. Prior to harnessing their reparative nature for degenerative diseases, concerns regarding their genetic integrity and mutation acquisition need to be addressed. Here we review pluripotent and multipotent stem cell response to DNA damage including differences in DNA repair kinetics, specific repair pathways (homologous recombination vs. non-homologous end joining), and apoptotic sensitivity. We also describe DNA damage and repair strategies during reprogramming and discuss potential genotoxic agents that can reduce the inherent risk for teratoma formation and mutation accumulation. Ensuring genomic stability in stem cell lines is required to achieve the quality control standards for safe clinical application.