Satellite cells, localized in the niche between the membrane of muscle fiber and basal lamina that surrounds it, serve as a source of myoblasts that are necessary for both growth and regeneration of skeletal muscle. Apart from their ability to convert into myoblasts, satellite cells are also able to self-renew, thus, they meet requirements for tissue specific, unipotent stem cells. Recently conducted research revealed that population of satellite cells is heterogeneous. The article summarizes current information on biology and characteristics of satellite cells, and also describes models concerning mechanisms of self-renewal and differentiation of satellite cells. Experiments regarding in vitro differentiation of satellite cells into other cell types are also discussed. Moreover, other population of stem cells localized in the muscle are described in this review.