Lineage tracing is a powerful tool that can be used to uncover cell fates. Here, we describe a novel method for the quantitative analysis of clonal dynamics in grafted cancer tissues. The protocol involves the preparation and validation of cells for lineage tracing, establishment of grafts and label induction, analysis of clone-size distribution and fitting of the experimental data to a mathematical tumor growth model. In contrast to other lineage-tracing strategies, the method described here assesses stem cell functionality and infers tumor expansion dynamics independently of molecular markers such as putative cancer stem cell (CSC)-specific genes. The experimental system and analytical framework presented can be used to quantify clonal advantages that specific mutations provide, in both the absence and presence of (targeted) therapeutic agents. This protocol typically takes ~20 weeks to complete from cell line selection to inference of growth dynamics, depending on the grafted cancer growth rate.