Although Barrett's esophagus has been recognized for over 50 years, the cellular and molecular mechanisms leading to the replacement of squamous esophageal epithelium with a columnar type are largely unknown. Barrett's is known to be an acquired process secondary to chronic gastroesophageal reflux disease and occurs in the presence of severe disruption of the gastroesophageal barrier and reflux of a mixture of gastric and duodenal content. Current hypothesis suggest that epithelial change occurs due to stimulation of esophageal stem cells present in the basal layers of the epithelium or submucosal glands, toward a columnar epithelial differentiation pathway. The transcription factor CDX2 seems to play a key role in promoting the cellular biology necessary for columnar differentiation, and can be induced by bile salt and acid stimulation. Several cellular signaling pathways responsible for modulation of intestinal differentiation have also been identified and include WNT, Notch, BMP, Sonic HH and TGFB. These also have been shown to respond to stimulation by bile acids, acid or both and may influence CDX2 expression. Their relative activity within the stem cell population is almost certainly responsible for the development of the esophageal columnar epithelial phenotype we know as Barrett's esophagus.