This article traces the history of using embryo-derived stem cells for genetic manipulation--first teratocarcinoma stem cells and then embryonic stem cells. It encompasses several decades of research investigating the similarity between cellular mechanisms of normal growth and differentiation in the embryo and abnormal growth and differentiation in neoplasia. The limited developmental potential of teratocarcinoma-derived, embryonal carcinoma (EC) stem cells is contrasted to the totipotentiality displayed by embryonic stem (ES) cells derived directly from early embryos. From early attempts to select mutants in EC cells in culture to the spectacular success of targeting genes in ES cells by homologous recombination, the different lines of developmental, genetic and cancer research have converged to open vast new areas of possibility in genetic manipulation.