The finding that tumours, like normal tissues, are endowed with varying degrees of cellular heterogeneity has far-reaching consequences for our understanding of cancer. The cancer stem cell and clonal evolution models have both been proposed to explain tumour-associated cellular heterogeneity. Here, we briefly review these two non-exclusive models with special emphasis on how they aid our understanding of cancer and their implications for therapeutic strategies. Finally, we discuss the close association between basic stem cell biology and cancer, focusing on the role of self-renewal.