The analysis of stem cell hierarchies in human cancers has been hampered by the impossibility of identifying or tracking tumor cell populations in an intact environment. To overcome this limitation, we devised a strategy based on editing the genomes of patient‐derived tumor organoids using CRISPR/Cas9 technology to integrate reporter cassettes at desired marker genes. As proof of concept, we engineered human colorectal cancer (CRC) organoids that carry EGFP and lineage‐tracing cassettes knocked in the LGR5 locus. Analysis of LGR5‐EGFP+ cells isolated from organoid‐derived xenografts demonstrated that these cells express a gene program similar to that of normal intestinal stem cells and that they propagate the disease to recipient mice very efficiently. Lineage‐tracing experiments showed that LGR5+ CRC cells self‐renew and generate progeny over long time periods that undergo differentiation toward mucosecreting‐ and absorptive‐like phenotypes. These genetic experiments confirm that human CRCs adopt a hierarchical organization reminiscent of that of the normal colonic epithelium. The strategy described herein may have broad applications to study cell heterogeneity in human tumors. Synopsis To overcome technical and conceptual limitations in the analysis of tumor cell heterogeneity, the genomes of human cancer organoids were edited to integrate reporter and lineage tracing cassettes that enable tracking selected tumor cell populations in vivo. CRISPR/Cas9‐mediated genome editing facilitated the integration of cassettes at marker genes in colorectal cancer (CRC) patient‐derived organoids (PDOs). A GFP reporter integrated at the LGR5 locus labeled a population of ISC‐like tumor cells in human CRCs. The LGR5‐GFP+ cell population was enriched in tumor‐initiating cells. Lineage tracing analysis using CreERT2 knock‐in PDOs demonstrated that in intact tumors LGR5+ CRC cells are multipotent, long‐lived and produce cell clones that scale proportional to tumor growth. Double edited LGR5‐GFP/Ki67‐RFP PDOs revealed the existence of proliferating and quiescent LGR5+ CRC cells. To overcome technical and conceptual limitations in the analysis of tumor cell heterogeneity, the genomes of human cancer organoids were edited to integrate reporter and lineage tracing cassettes that enable tracking selected tumor cell populations in vivo.