How does a teratoma form?

Embryonal tissue. A teratoma is a tumor of tissues comprising different organs such as bone, skin, nerve tissue usually derived from more than one germ layer. The teratomas have been reported to contain hair, teeth, bone and, very rarely, more complex organs or processes such as eyes,torso, and hands, feet, or other limbs, virtually attempting to recreate a fetus. They arise from embryonal cells in ovary and testis.
Stem cells. Most tumors are formed from a single type of tissue. A teratoma is a tumor that is made up of many different types of tissue. It comes from a pluripotent stem cell, which means a cell that can become any type of tissue in the body.