The gastric mucosa and its glands show continuous bidirectional self-renewal via differentiation from stem and progenitor cells. Here, two types of gastric units, i.e., fundic and antral units, form delicate homeostatic systems. This review focuses on recent developments concerning the different types of gastric stem cells, the central function of parietal cells as organizing centres of fundic units, the stepwise differentiation of zymogenic cells via trans-differentiation of mucous neck cells, and unexpected differences between fundic and antral surface mucous cells. Within the last years, the central role of Sonic hedgehog (Shh) for correct self-renewal of fundic units has become much clearer. Furthermore, also the knowledge concerning the genesis of gastric cancer increased substantially. Here, chronic inflammation leads to dysregulated differentiation processes and finally to cancer. Remarkable progress has been made particularly concerning the genesis of two metaplastic cell lineages, i.e., the TFF2/spasmolytic polypeptide expressing metaplasia (SPEM) and intestinal metaplasia, which both arise in intestinal-type cancers in fundic units by dysregulated trans-differentiation of the zymogenic cell lineage. Additionally, Shh has been recognized as a target for inflammatory processes and an important player for innate immunity processes. Thus, stem cells, self-renewal, and gastric cancer are intimately linked.