Cancer has become a public health problem. The exploration of pathogenesis and therapy of cancer is mainly under the guidance of gene mutation theory. But the therapeutic effect of cancer is not satisfactory, and many predictions of gene mutation theory do not conform actual phenomena of cancer. The research results of mechanism of genetic molecular mutation trap us in an intricate molecular maze hopelessly. The dilemma compels us to doubt about the correctness of gene mutation theory and re-understand the nature of tumor. This study explores the nature of cancer by the method of theoretical analysis by the view of tissue regeneration, and draws a conclusion that the carcinogenesis is consequence of failure of tissue development. Tumors originate from tissue regeneration, tumor cells originate from normal tissue stem cells. The tumor cells are only normal immature cells. Tumor promoters stimulate stem cells to proliferate. Carcinogens obstruct the inducers from inducing tissue stem cells differentiation outside of cells. With tumor promoters and carcinogens, the tissue stem cells proliferate, but cannot differentiate into mature cells, and stop in different phases of differentiation forming atypical hyperplasia of different degrees and tumors of various differentiation grades in tissue. The tumor cells can differentiate into normal mature cells with suitable inducers. The normal stem cells will develop into tumor stem cells without suitable inducers. The ultimate solution of tumor is differentiation therapy. Stem cell transplantation should be cautious.