The nematode Caenorhabditis elegans (C. elegans) offers a unique opportunity for biological and basic medical researches due to its genetic tractability and well-defined developmental lineage. It also provides an exceptional model for genetic, molecular, and cellular analysis of human disease-related genes. Recently, C. elegans has been used as an ideal model for the identification and functional analysis of drugs (or small-molecules) in vivo. In this review, we describe conserved oncogenic signaling pathways (Wnt, Notch, and Ras) and their potential roles in the development of cancer stem cells. During C. elegans germline development, these signaling pathways regulate multiple cellular processes such as germline stem cell niche specification, germline stem cell maintenance, and germ cell fate specification. Therefore, the aberrant regulations of these signaling pathways can cause either loss of germline stem cells or overproliferation of a specific cell type, resulting in sterility. This sterility phenotype allows us to identify drugs that can modulate the oncogenic signaling pathways directly or indirectly through a high-throughput screening. Current in vivo or in vitro screening methods are largely focused on the specific core signaling components. However, this phenotype-based screening will identify drugs that possibly target upstream or downstream of core signaling pathways as well as exclude toxic effects. Although phenotype-based drug screening is ideal, the identification of drug targets is a major challenge. We here introduce a new technique, called Drug Affinity Responsive Target Stability (DARTS). This innovative method is able to identify the target of the identified drug. Importantly, signaling pathways and their regulators in C. elegans are highly conserved in most vertebrates, including humans. Therefore, C. elegans will provide a great opportunity to identify therapeutic drugs and their targets, as well as to understand mechanisms underlying the formation of cancer.