Micromanipulation of murine and human hematopoietic progenitors has demonstrated various combinations of lineages in multilineage colonies, a finding consistent with the stochastic model of stem cell differentiation. Debate continued, however, on the mechanisms of stem cell differentiation, partly because some studies of cell lines suggested a deterministic model. Recently, transfection of primary hematopoietic progenitors with natural or chimeric cytokine receptors demonstrated that forced expression of cytokine receptors does not change the intrinsic differentiation potential of the primary progenitors. Studies also have demonstrated remarkable absence of specificity of signaling pathways in the primary progenitors. These studies are consistent with the stochastic model of stem cell differentiation in which cytokines play permissive and not instructive roles. This review summarizes some of the pertinent literature and discusses the cellular and molecular mechanisms of stem cell differentiation.