Evidence for distinct human cancer stem cells (CSCs) remains contentious and the degree to which different cancer cells contribute to propagating malignancies in patients remains unexplored. In low- to intermediate-risk myelodysplastic syndromes (MDS), we establish the existence of rare multipotent MDS stem cells (MDS-SCs), and their hierarchical relationship to lineage-restricted MDS progenitors. All identified somatically acquired genetic lesions were backtracked to distinct MDS-SCs, establishing their distinct MDS-propagating function in vivo. In isolated del(5q)-MDS, acquisition of del(5q) preceded diverse recurrent driver mutations. Sequential analysis in del(5q)-MDS revealed genetic evolution in MDS-SCs and MDS-progenitors prior to leukemic transformation. These findings provide definitive evidence for rare human MDS-SCs in vivo, with extensive implications for the targeting of the cells required and sufficient for MDS-propagation.