The skin is the first line of defense against dehydration and external environmental aggressions. It constantly renews itself throughout adult life mainly due to the activity of tissue-specific stem cells. In this review, we discuss fundamental characteristics of different stem cell populations within the skin and how they are able to contribute to normal skin homeostasis. We also examine the most recent results regarding the cell-intrinsic and -extrinsic components of the stem cell niche within the adult skin epithelium. Finally, we address the recent efforts to understand how abnormal regulation of stem cell activity contributes to the initiation and progression of skin-associated cancers.