An intriguing feature of autosomal dominant polycystic kidney disease (ADPKD) is the focal and sporadic nature of individual cyst formation. Typically, only a few renal cysts are detectable in an affected individual during the first two decades of life. By the fifth decade, however, hundreds to thousands of renal cysts can be found in most patients. Additionally, significant intra-familial variability of ADPKD has been well documented. Taken together, these findings suggest that factor(s) in addition to the germline mutation of a polycystic kidney disease gene might be required for individual cyst formation. Indeed, recent studies have provided compelling evidence in support of a "two-hit" model of cystogenesis in ADPKD. In this model, inactivation of both copies of a polycystic kidney disease gene by germline and somatic mutations within an epithelial cell provides growth advantages for it to proliferate clonally into a cyst. This article highlights key findings of these recent studies and discusses the controversies and implications of the "two-hit" model in ADPKD.