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Many adult tissue stem cells, such as the cells of the hematopoietic system, gastrointestinal epithelium, brain, epidermis, mammary gland and lung have now been identified, all of them fulfilling a crucial role in supplying organisms with mature cells during normal homeostasis as well as in times of tissue generation or repair. Two unique features characterize adult stem cells: the ability to generate new pluripotent stem cells (to self-renew) and the ability to give rise to differentiated progeny that has lost its self-renewal capacity. Our understanding of the mechanisms that determine whether, where and when a stem cell will self-renew or differentiate is still limited, but recent advances have indicated that the stem cell microenvironment, or niche, provides essential cues that direct these cell fate decisions. Moreover, loss of control over these cell fate decisions might lead to cellular transformation and cancer. This review addresses the current understandings of the molecular mechanisms that regulate hematopolietic stem cell self-renewal in the niche and how leukemic transformation might change the dependency of leukemic stem cells on their microenvironment for self-renewal and survival.