In vitro cell and tissue-based systems have tremendous potential in fundamental research and for commercial applications such as clonal propagation, genetic engineering and production of valuable metabolites. Since the invention of plant cell and tissue culture techniques more than half a century ago, scientists have been trying to understand the morphological, physiological, biochemical and molecular changes associated with tissue culture responses. Establishment of de novo developmental cell fate in vitro is governed by factors such as genetic make-up, stress and plant growth regulators. In vitro culture is believed to destabilize the genetic and epigenetic program of intact plant tissue and can lead to chromosomal and DNA sequence variations, methylation changes, transposon activation, and generation of somaclonal variants. In this review, we discuss the current status of understanding the genomic and epigenomic changes that take place under in vitro conditions. It is hoped that a precise and comprehensive knowledge of the molecular basis of these variations and acquisition of developmental cell fate would help to devise strategies to improve the totipotency and embryogenic capability in recalcitrant species and genotypes, and to address bottlenecks associated with clonal propagation.