The possibility of light generation and/or amplification in silicon has attracted a great deal of attention for silicon-based optoelectronic applications owing to the potential for forming inexpensive, monolithic integrated optical components. Because of its indirect bandgap, bulk silicon shows very inefficient band-to-band radiative electron-hole recombination. Light emission in silicon has thus focused on the use of silicon engineered materials such as nanocrystals, Si/SiO2 superlattices, erbium-doped silicon-rich oxides, surface-textured bulk silicon and Si/SiGe quantum cascade structures. Stimulated Raman scattering (SRS) has recently been demonstrated as a mechanism to generate optical gain in planar silicon waveguide structures. In fact, net optical gain in the range 2-11 dB due to SRS has been reported in centimetre-sized silicon waveguides using pulsed pumping. Recently, a lasing experiment involving silicon as the gain medium by way of SRS was reported, where the ring laser cavity was formed by an 8-m-long optical fibre. Here we report the experimental demonstration of Raman lasing in a compact, all-silicon, waveguide cavity on a single silicon chip. This demonstration represents an important step towards producing practical continuous-wave optical amplifiers and lasers that could be integrated with other optoelectronic components onto CMOS-compatible silicon chips.