All of the different types of stomach epithelial cells are known to be derived from a single progenitor cell in each gland. Similarly, cancers develop from single cells, based on data from clonality analysis in C3H/HeN<-->BALB/c chimeric mice. Using gastric and intestinal epithelial cell markers, intestinal metaplasia (IM) can be divided into two major types: a gastric and intestinal (GI) mixed type, and a solely intestinal (I) type. Ectopic expression of Cdx genes and down-regulation of Sox2 in isolated single GI mixed IM glands suggests abnormal differentiation of stem cells that can produce both gastric (G) and I type cells. Similarly, phenotypic expression of gastric cancer cells of each histological type can be clearly classified into G and I type epithelial cells. The heterogeneity of phenotypic expression of gastric cancer cells in individual cancers is assumed to reflect this intrinsic potential for differentiation in two directions. Gastric cancers at early stages, independent of the histological type, mainly consist of G type cells, and phenotypic shift from G to I type expression is clearly observed with progression. The data thus suggest IM may not be a preneoplastic change in gastric carcinoma, but rather that cells of the I type may appear independently in the gastric mucosa in IM and in gastric cancers. Intestinalization of gastric mucosa and cancer cells may represent a kind of homeotic transformation. Whether disturbance of the regulation of Sox2 and Cdx genes may be of importance to the biological behavior of gastric cancers should therefore be clarified in future studies.