Discoveries of the ability of bone marrow-derived cells (BMDCs) to differentiate into nonhematopoietic cells have opened up a new field of inquiry in adult stem cell plasticity. There are far more questions than there are answers to date. We and others have investigated whether differentiation occurs in response to tissue damage, what the underlying mechanisms might be, and whether this plasticity may be useful clinically. BMDC have been shown to differentiate into mature-appearing epithelial cells in the lung, liver, gastrointestinal tract, skin, buccal mucosa, and kidney. The mechanism(s) by which cells transition to these nonhematopoietic phenotypes is not yet clear, but possibilities include cell-to-cell fusion, direct differentiation of a nonhematopoietic precursor cell from the BM, and transdifferentiation of a BM cell that had previously been committed to a different phenotype. Data obtained to date support the first two possibilities, and there are no data proving that transdifferentiation is responsible for the engraftment of marrow-derived epithelial cells. Theoretically, the engraftment of marrow-derived cells as nonhematopoietic cell types could be used in either the autologous or the allogeneic setting to restore functional epithelial cells to a diseased organ. For example, a marrow-derived cell that has been transduced to express a specific transgene can continue to express this transgene after it engrafts as a nonhematopoietic epithelial cell in the lung. Analyses of the kinetics of this engraftment suggest that it can be increased within days to weeks following certain types of injury, depending on the tissue examined. Most reports of adult stem cell plasticity show relatively low frequencies of marrow-derived nonhematopoietic cells, on the order of 1 in 10(3) to 1 in 10(4) epithelial cells in many organs being marrow derived. This frequency is likely to be too low to be of therapeutic relevance. Therefore, future efforts will need to be focused on enhancing levels of engraftment.