Embryonic stem cells (ESCs) are associated with a high degree of plasticity, which allows them to self-renew and differentiate into every somatic cell. During differentiation, ESCs follow a hierarchically organized pattern towards tissue specificity, which ultimately results in permanent cell cycle arrest and a loss of cellular plasticity. In contrast to their normal somatic counterparts, cancer cells retain elevated levels of plasticity that include switches between epithelial and mesenchymal phenotypes. Transitions between these cell stages have lately been linked to the reacquisition of stem cell features during cellular reprogramming and dedifferentiation in normal and neoplastic cells. In this review, we discuss the key factors and their interplay that is needed to regain a stem cell stage with a particular emphasis put on the impact of cell cycle regulation. Apart from mechanistic insights into the emerging fundamental processes of stem cell plasticity and capacity to transdifferentiate, we also highlight implications of these concepts for tissue biology, tumorigenesis, and cancer therapy.