Hematopoietic stem cells (HSCs) are the best studied of the tissue-specific stem cells. By definition, HSCs have long been regarded as restricted to formation of blood cells of both the lymphoid and myeloid lineages. HSCs residing in the bone marrow microenvironment have self-renewal capacity and can repopulate the hematopoietic system of irradiated transplant recipients for the lifetime of the individual. Therefore, HSCs are extremely important targets for gene therapy applications aimed toward the treatment of inherited and acquired blood disorders. However, recent studies have suggested that a subpopulation of HSCs may have the ability to contribute to diverse cell types such as hepatocytes, myocytes, and neuronal cells, especially following induced tissue damage. Preclinical amelioration of liver disease and myocardial infarcts by HSC-enriched bone marrow cell populations raises the possibility that HSC transplants have the potential to provide therapeutic benefit for a wide variety of diseases. These surprising findings contradict the dogma that adult stem cells are developmentally restricted. Extrapolation of these findings to the clinic will be facilitated by prospective identification of the stem cells that possess this developmental plasticity. Furthermore, characterization of the signaling pathways and molecular determinants regulating the remarkable transdifferentiation capacity of these stem cells may provide insight into novel approaches for modulating frequency of differentiative potential.