There has been considerable focus on the ability of bone marrow-derived cells to differentiate into non-haematopoietic cells of various tissue lineages, including cells of the kidney. This growing evidence has led to a reconsideration of the source of cells contributing to renal repair following injury. The kidney has an inherent ability for recovery and regeneration following acute damage. It is thought that dedifferentiation of glomerular and tubular cells to a more embryonic/mesenchymal phenotype represent key processes for recovery in response to damage. However, there has been much contention as to the source of regenerating renal cells. The present review focuses on new aspects of the plasticity of intrinsic renal cells and their role in renal remodelling and scarring. Growing support also suggests that bone marrow-derived cells have the ability to contribute to structural and functional repair following acute renal failure. Evidence for bone marrow cell engraftment in the repairing kidney leading to incorporation into a variety of tissue types is discussed. Because cell death and fibrosis is a common end-point in a variety of acute and chronic renal nephropathies, the paradigm of stem cell plasticity may have important implications in the cellular and pathological mechanisms of renal injury and repair. A better understanding of the processes controlling extra-renal cell engraftment and intrinsic renal cell differentiation may provide important clues for the development of new cell-based therapies in the field of renal reparative medicine.