Human neurological disorders such as Parkinson's disease, Huntington's disease, amyotrophic lateral sclerosis (ALS), Alzheimer's disease, multiple sclerosis (MS), stroke, and spinal cord injury are caused by a loss of neurons and glial cells in the brain or spinal cord. Cell replacement therapy and gene transfer to the diseased or injured brain have provided the basis for the development of potentially powerful new therapeutic strategies for a broad spectrum of human neurological diseases. However, the paucity of suitable cell types for cell replacement therapy in patients suffering from neurological disorders has hampered the development of this promising therapeutic approach. In recent years, neurons and glial cells have successfully been generated from stem cells such as embryonic stem cells, mesenchymal stem cells, and neural stem cells, and extensive efforts by investigators to develop stem cell-based brain transplantation therapies have been carried out. We review here notable experimental and preclinical studies previously published involving stem cell-based cell and gene therapies for Parkinson's disease, Huntington's disease, ALS, Alzheimer's disease, MS, stroke, spinal cord injury, brain tumor, and lysosomal storage diseases and discuss the future prospects for stem cell therapy of neurological disorders in the clinical setting. There are still many obstacles to be overcome before clinical application of cell therapy in neurological disease patients is adopted: 1) it is still uncertain what kind of stem cells would be an ideal source for cellular grafts, and 2) the mechanism by which transplantation of stem cells leads to an enhanced functional recovery and structural reorganization must to be better understood. Steady and solid progress in stem cell research in both basic and preclinical settings should support the hope for development of stem cell-based cell therapies for neurological diseases. Copyright 2009 Wiley-Liss, Inc.