Epigenetic mechanisms play essential roles in determining distinct cell fates during the development of multicellular organisms. Histone proteins represent crucial epigenetic components that help specify cell identities. Previous work has demonstrated that during the asymmetric cell division of Drosophila male germline stem cells (GSCs), histones H3 and H4 are asymmetrically inherited, such that pre-existing (old) histones are segregated towards the self-renewing GSC whereas newly synthesized (new) histones are enriched towards the differentiating daughter cell. In order to further understand the molecular mechanisms underlying this striking phenomenon, two key questions must be answered: when and how old and new histones are differentially incorporated by sister chromatids, and how epigenetically distinct sister chromatids are specifically recognized and segregated. Here, we discuss recent advances in our understanding of the molecular mechanisms and cellular bases underlying these fundamental and important biological processes responsible for generating two distinct cells through one cell division.