In this review we focus on epidermal stem cells in the normal regeneration of the skin as well as in wounded and psoriatic skin. Furthermore, we discuss current data supporting the idea of cancer stem cells in the pathogenesis of skin carcinoma and malignant melanoma. Epidermal stem cells present in the basal layer of the interfollicular epidermis and in the bulge region of the hair follicle play a critical role for normal tissue maintenance. In wound healing, multipotent epidermal stem cells contribute to re-epithelization. It is possible that defects in growth control of either epidermal stem cells or transit amplifying cells constitute a primary pathogenetic factor in the epidermal hyperproliferation seen in psoriasis. In cutaneous malignancies mounting evidence supports a stem cell origin in skin carcinoma and malignant melanoma and a possible existence of cancer stem cells.