Major questions about stem cell systems include what type(s) of stem cells are involved (unipotent/totipotent/pluripotent/multipotent stem cells) and how the self-renewal and differentiation of stem cells are regulated. Sponges, the sister group of all other animals and probably the earliest branching multicellular lineage of extant animals, are thought to possess totipotent stem cells. This review introduces what is known about the stem cells in sponges based on histological studies and also on recent molecular biological studies that have started to reveal the molecular and cellular mechanisms of the stem cell system in sponges (mainly in demosponges). The currently proposed model of the stem cell system in demosponges is described, and the possible applicability of this model to other classes of sponges is discussed. Finally, a possible scenario of the evolution of stem cells, including how migrating stem cells arose in the urmetazoan (the last common ancestor of metazoans) and the evolutionary origin of germ line cells in the urbilaterian (the last common ancestor of bilaterians), are discussed.