Given the obvious therapeutic potential of stem cells, great excitement greeted the claims that adult stem cells from bone marrow and the CNS can jump lineage. Subsequent work has suggested that the apparent transdifferentiation was due to contamination of the donor cells or their fusion with recipient cells, leading some investigators to dismiss adult stem cell plasticity as a fiction. Is it? In a Commentary on p. 599, Malcolm Alison and co-workers examine the evidence. Findings such as the observation that XY (rather than XXXY) mucosal cells appear in women who have received peripheral blood stem cells or bone marrow from male donors suggest that cell fusion cannot account for all transdifferentiation. Moreover, transdifferentiation of bone-marrow-derived stem cells has been observed in co-cultures separated by a semipermeable membrane so that fusion cannot occur. Alison and co-workers also discuss the problem of reproducibility, pointing out that, in cases where transdifferentiation could not be reproduced, conditions were not identical to those in the original experiments. The authors conclude that transdifferentiation probably does occur — but rarely — and that establishing whether transdifferentiated cells can undergo clonal expansion should be the next step.