ABSTRACT Archaeocytes are considered a key cell type in sponges (Porifera). They are believed to be multifunctional cells performing various functions, from nutrient digestion to acting as adult stem cells (ASCs). Thus, archaeocytes are mentioned in discussions on various aspects of sponge biology. As presumed ASCs of an early‐diverged animal taxon, archaeocytes are of great fundamental interest for further progress in understanding tissue functioning in metazoans. However, the term ‘archaeocyte’ is rather ambiguous in its usage and understanding, and debates surrounding archaeocytes have persisted for over a century, reflecting the ongoing complexity of understanding their nature. This article presents a comprehensive revision of the archaeocyte concept, including both its historical development and biological features (i.e. taxonomic distribution, characteristics, and functions). The term ‘archaeocyte’ and its central aspects were introduced as early as the end of the 19th century based on data mainly from demosponges. Remarkably, despite the general lack of comparative and non‐histological data, these early studies already regarded archaeocytes as the ASCs of sponges. These early views were readily inherited by subsequent studies, often without proper verification, shaping views on many aspects of sponge biology for more than a century. Taking into account all available data, we propose considering the archaeocytes as a cell type specific to the class Demospongiae. Clear homologues of archaeocytes are absent in other sponge classes. In demosponges, the term ‘archaeocytes’ refers to mesohyl cells that have an amoeboid shape, nucleolated nuclei, and non‐specific inclusions in the cytoplasm. The absence of specific traits makes the archaeocytes a loosely defined and probably heterogeneous cell population, rendering the exhaustive characterisation of the ‘true’ archaeocyte population impossible. At the same time, the molecular characterisation of archaeocytes is only beginning to develop. Stemness and almost unlimited potency have always been at the core of the traditional archaeocyte concept. However, currently, the most consistent data on archaeocyte stem cell function come only from developing gemmules of freshwater sponges. For tissues of adult demosponges, the data favour a two‐component stem cell system, in which archaeocytes may cooperate with another stem cell population, choanocytes. Simultaneously, cells with archaeocyte morphology function as macrophages in demosponges, participating in the food digestion cycle and immune defence. Such cells should be denoted with the more neutral term ‘nucleolar amoebocytes’, as the term ‘archaeocyte’ not only describes the morphology of a cell but also introduces the proposition of its stem nature. Thus, the future usage of the term ‘archaeocyte’ should be limited to cases where a cell is shown or at least presumed to be a stem cell.