Functional genomics has provided evidence that the human genome transcribes a large number of non-coding genes in addition to protein-coding genes, including microRNAs and long non-coding RNAs (lncRNAs). Among the group of lncRNAs are pseudogenes that have not been paid attention in the past, compared to other members of lncRNAs. However, increasing evidence points the important role of pseudogenes in diverse cellular functions, and dysregulation of pseudogenes are often associated with various human diseases including cancer. Like other types of lncRNAs, pseudogenes can also function as master regulators for gene expression and thus, they can play a critical role in various aspects of tumorigenesis. In this review we discuss the latest developments in pseudogene research, focusing on how pseudogenes impact tumorigenesis through different gene regulation mechanisms. Given the high sequence homology with the corresponding parent genes, we also discuss challenges for pseudogene research.