Single-cell assays have revealed the importance of heterogeneity in many biological systems. However, limited sensitivity is a major hurdle for uncovering cellular variation. To overcome it, we developed CloneSeq, combining clonal expansion inside 3D hydrogel spheres and droplet-based RNA sequencing (RNA-seq). We show that clonal cells maintain similar transcriptional profiles and cell states. CloneSeq of lung cancer cells revealed cancer-specific subpopulations, including cancer stem-like cells, that were not revealed by scRNA-seq. Clonal expansion within 3D soft microenvironments supported cellular stemness of embryonic stem cells (ESCs) even without pluripotent media, and it improved epigenetic reprogramming efficiency of mouse embryonic fibroblasts. CloneSeq of ESCs revealed that the differentiation decision is made early during Oct4 downregulation and is maintained during early clonal expansion. Together, we show CloneSeq can be adapted to different biological systems to discover rare subpopulations by leveraging the enhanced sensitivity within clones.