It has spurred a new generation of laboratory studies into other illnesses, including schizophrenia, which may lead to new treatments.
Basically, Gurdon, 79, and Yamanaka, 50, showed how to make the equivalent of embryonic stem cells without the ethical questions those very versatile cells pose, a promise scientists are scrambling to fulfill.
Once created, these "blank slate" cells can be nudged toward developing into other cell types. Skin cells can ultimately be transformed into brain cells, for example.
Just last week, scientists reported turning skin cells from mice into eggs that produced baby mice, a possible step toward new fertility treatments.
Gurdon and Yamanaka performed "courageous experiments" that challenged scientific opinion, said Doug Melton, codirector of the Harvard Stem Cell Institute.
"Their work shows . . . that while cells might be specialized to do one thing, they have the potential to do something else," Melton said. It "really lays the groundwork for all the excitement about stem cell biology."
Another Harvard stem cell researcher, George Daley, said, "I don't think anybody is surprised" by the award announcement. "The fact that these two share it together is inspired."
In announcing the $1.2 million award, the Nobel committee at Stockholm's Karolinska Institute said the work has "revolutionized our understanding of how cells and organisms develop."
Gurdon showed in 1962 that DNA from specialized cells of tadpoles, like skin or intestinal cells, could be used to clone more tadpoles. In 1997, the same process led to the cloning of Dolly the sheep, showing it would also work in mammals.
Forty-four years after Gurdon's discovery, in 2006, Yamanaka and his team moved beyond tadpoles. They showed that a surprisingly simple recipe could turn mouse skin cells back into primitive cells, which in turn could be prodded into different kinds of mature cells. The work was later repeated with human cells.
In theory those primitive cells are "blank slates" - like embryonic stem cells that can be turned into any cell in the body.
Turning a skin cell into a stem cell takes weeks in a lab. Scientists introduce two to four genes that turn the cell's own genes on and off. It's a little like rebooting a computer, changing the cell from running the collection of genes that make it a skin cell into using another set that make it a stem cell.
Gurdon, who said his ambitions to become a scientist were dismissed as "completely ridiculous" by his headmaster when he was in his teens, has served as a professor of cell biology at Cambridge University's Magdalene College. He is now at the Gurdon Institute in Cambridge, which he founded.
Yamanaka worked at the Gladstone Institute in San Francisco and Nara Institute of Science and Technology in Japan. He is currently at Kyoto University and also affiliated with the Gladstone Institute. Yamanaka is the first Japanese scientist to win the Nobel medicine award since 1987.