The stem cell system is one of the unique systems that have evolved only in multicellular organisms. Major questions about this system include what type(s) of stem cells are involved (pluri-, multi- or uni-potent stem cells), and how the self-renewal and differentiation of stem cells are regulated. To understand the origin of the stem cell system in metazoans and to get insights into the ancestral stem cell itself, it is important to discover the molecular and cellular mechanisms of the stem cell system in sponges (Porifera), the evolutionarily oldest extant metazoans. Histological studies here provided a body of evidence that archeocytes are the stem cells in sponges, and recent molecular studies of sponges, especially the finding of the expression of Piwi homologues in archeocytes and choanocytes in a freshwater sponge, Ephydatia fluviatilis, have provided critical insights into the stem cell system in demosponges. Here I introduce archeocytes and discuss (i) modes of archeocyte differentiation, (ii) our current model of the stem cell system in sponges composed of both archeocytes and choanocytes based on our molecular analysis and previous microscopic studies suggesting the maintenance of pluripotency in choanocytes, (iii) the inference that the Piwi and piRNA function in maintaining stem cells (which also give rise to gametes) may have already been achieved in the ancestral metazoan, and (iv) possible hypotheses about how the migrating stem cells arose in the urmetazoan (protometazoan) and about the evolutionary origin of germline cells in the urbilaterian (protobilaterian).