The ability of stem cells to self-renew and to replace mature cells is fundamental to ontogeny and tissue regeneration. Stem cells of the adult organism can be categorized as mono-, bi-, or multipotent, based on the number of mature cell types to which they can give rise. In contrast, pluripotent stem cells of the early embryo have the ability to form every cell type of the adult body. Permanent lines of pluripotent stem cells have been derived from preimplantation embryos (embryonic stem cells), fetal primordial germ cells (embryonic germ cells), and malignant teratocarcinomas (embryonal carcinoma cells). Cultured pluripotent stem cells can easily be manipulated genetically, and they can be matured into adult-type stem cells and terminally differentiated cell types in vitro, thereby, providing powerful model systems for the study of mammalian embryogenesis and disease processes. In addition, human embryonic stem cell lines hold great promise for the development of novel regenerative therapies. To fully utilize the potential of these cells, we must first understand the mechanisms that control pluripotent stem cell fate and function. In recent decades, the microenvironment or niche has emerged as particularly critical for stem cell regulation. In this article, we review how pluripotent stem cell signal transduction mechanisms and transcription factor circuitries integrate information provided by the microenvironment. In addition, we consider the potential existence and location of adult pluripotent stem cell niches, based on the notion that a revealing feature indicating the presence of stem cells in a given tissue is the occurrence of tumors whose characteristics reflect the normal developmental potential of the cognate stem cells.