The remarkable plasticity of plants is best exemplified by the capacity of their somatic cells to regenerate entire organs or the organism itself. The molecular and cellular events underlying this ability are complex and multifaceted. The initial phase, that is triggered either by wounding or exogenous hormone application and leads to cell cycle reactivation, is often called dedifferentiation. This review proposes that the dedifferentiation of mature somatic cells is a two-step process. It involves a transition into a transient senescence-like state. This leads to a critical cellular condition; in the absence of proliferative signals, cells become committed to programmed cell death. If, however, it is succeeded by a second hormonal rescue step, when phytohormones, mainly auxin and cytokinin, override the death pathway and activate cell division, callus arises. Callus is not an undifferentiated homogenous mass of cells, but an unorganised tissue with at least some cells having ground-tissue-like molecular identity with high developmental potential. Callus, though, might also form from pre-existing, competent populations of cells, e.g. pericycle cells, with no senescence-like intermitting state. It is also discussed whether this “one-step” callus formation pathway can be referred to as dedifferentiation.