Germ cell tumors originate from ovarian, testicular and extragonadal germ cells. Tumor stem cells can retain most of the features of germ cells and form seminomas or dysgerminomas or, transform into developmentally pluripotent embryonic stem cells and give rise to teratomas or teratocarcinomas. Similar tumors can be experimentally produced in mice from early mouse embryos transplanted to extrauterine sites. The malignant stem cells of teratocarcinomas, called in analogy with their human counterparts embryonal carcinoma (EC), can be isolated and grown in culture and or propagated indefinitely by isotransplantation in syngeneic inbred mice. When injected into the blastocyst, i.e., the embryonic environment from which they have been originally isolated, EC cells lose their malignancy and become benign, participating in the normal development of the injected blastocyst. Injection of EC cells into blastocysts has been used to generate transgenic mice. Developmentally pluripotent non-neoplastic embryonic stem (ES) cells can be produced from mouse blastocysts cultured in vitro. These cells are developmentally similar to EC cells. In contrast to EC cells, ES cells injected into adult mice do not produce teratocarcinomas but only teratomas. Similar ES cells were produced from human blastocysts cultured in vitro. Human ES injected into nude mice produce teratomas composed of various somatic tissues. Human ES cells resemble mouse ES cells, but differ from human EC cells. Like their mouse equivalents, human ES cells could be used for generating experimental models of various diseases and, hopefully, for cell therapy in not so distant future.