Primary lung cancer may arise from the central (bronchial) or peripheral (bronchiolo-alveolar) compartments. However the origins of the different histological types of primary lung cancer are not well understood. Stem cells are believed to be crucial players in tumour development and there is much interest in identifying those compartments that harbour stem cells involved in lung cancer. Although the role of stem cells in carcinogenesis is not well characterised, emerging evidence is providing new insights into this process. Numerous studies have indicated that lung cancer is not a result of a sudden transforming event but a multistep process in which a sequence of molecular changes result in genetic and morphological aberrations. The exact sequence of molecular events involved in lung carcinogenesis is not yet well understood, therefore deeper knowledge of the aberrant stem cell fate signalling pathway could be crucial in the development of new drugs against the advanced setting.