Stem cells are believed to be crucial players in tumor development. There is much interest in identifying those compartments that harbor stem cells involved in lung cancer, given the high incidence and recurrence rate of this disease. In this issue of Cell, Kim and colleagues describe a niche in the bronchioalveolar duct junction of adult mouse lung that harbors stem cells from which adenocarcinomas are likely to arise. They enriched, propagated, and differentiated these stem cells in vitro and found that they were activated by the oncogenic protein K-ras. This study provides exciting insights into how the stem cell compartment operates during both normal lung-tissue homeostasis and the development of lung cancer. The new work offers perspectives on possible therapeutic interventions to combat lung cancer.