As a rapidly cycling tissue capable of fast repair and regeneration, the intestinal epithelium has emerged as a favored model system to explore the principles of adult stem cell biology. However, until recently, the identity and characteristics of the stem cell population in both the small intestine and colon has remained the subject of debate. Recent studies based on targeted lineage tracing strategies, combined with the development of an organotypic culture system, have identified the crypt base columnar cell as the intestinal stem cell, and have unveiled the strategy by which the balance between proliferation and differentiation is maintained. These results show that intestinal stem cells operate in a dynamic environment in which frequent and stochastic stem cell loss is compensated by the proliferation of neighboring stem cells. We review the basis of these experimental findings and the insights they offer into the mechanisms of homeostatic stem cell regulation.