Pax genes encode a family of transcription factors that orchestrate complex processes of lineage determination in the developing embryo. Their key role is to specify and maintain progenitor cells through use of complex molecular mechanisms such as alternate RNA splice forms and gene activation or inhibition in conjunction with protein co-factors. The significance of Pax genes in development is highlighted by abnormalities that arise from the expression of mutant Pax genes. Here, we review the molecular functions of Pax genes during development and detail the regulatory mechanisms by which they specify and maintain progenitor cells across various tissue lineages. We also discuss mechanistic insights into the roles of Pax genes in regeneration and in adult diseases, including cancer.