The mammalian intestine is covered by a single layer of epithelial cells that is renewed every 4-5 days. This high cell turnover makes it a very attractive and comprehensive adult organ system for the study of cell proliferation and differentiation. The intestine is composed of proliferative crypts, which contain intestinal stem cells, and villi, which contain differentiated specialized cell types. Through the recent identification of Lgr5, an intestinal stem cell marker, it is now possible to visualize stem cells and study their behavior and differentiation in a much broader context. In this review we describe the identification of intestinal stem cells. We also discuss genetic studies that have helped to elucidate those signals important for progenitor cells to differentiate into one of the specialized intestinal epithelial cell types. These studies describe a genetic hierarchy responsible for cell fate commitment in normal gut physiology. Where relevant we also mention aberrant deregulation of these molecular pathways that results in colon cancer.