The cancer stem cell hypothesis posits that tumors are derived from a single cancer-initiating cell with stem cell properties. The task of identifying and characterizing a single cancer-initiating cell with stem cell properties has proven technically difficult because of the scarcity of the cancer stem cells in the tissue of origin and the lack of specific markers for cancer stem cells. Here we show that a single LA7 cell derived from rat mammary adenocarcinoma has the following properties: the differentiation potential to generate all of the cell lineages of the mammary gland; the ability to generate branched duct-like structures that recapitulate morphologically and functionally the ductal–alveolar-like architecture of the mammary tree; and the capacity to initiate heterogeneous tumors in nonobese diabetic-SCID mice. In addition, we show that cultured cells derived from tumors generated by a single LA7 cell-injection have properties similar to LA7 cells, can generate all of the cell lineages of the mammary gland, and recapitulate the ductal–alveolar-like architecture of the mammary tree. The properties of self-renewal, extensive capacity for proliferation, multilineage differentiation potential, and single-cell tumor-initiation potential suggest that LA7 cells are cancer stem cells and can be used as a model system to study the dynamics of tumor formation at the single-cell level.