The genetic analysis of four distinct Drosophila stem cells and their niches has revealed principles of stem cell biology that are likely to apply widely. A stem cell and its niche act together as integral parts of a system that supplies replacement cells when and where they are needed within a tissue. Stem cell/niche units are highly regulated and continue to operate despite the periodic turnover and replacement of all of their component cells. To successfully respond to tissue needs, these units receive and process a wide range of local and systemic information. A stem cell alone would be no more use at this task than an isolated neuron. It is only when integrated into a system of multiple interacting cells (the niche) that stem cells achieve the capacity to serve as the fundamental units of tissue homeostasis and repair.