Grafting cells to the CNS has been suggested and applied as a potential approach to CNS therapy through the selective replacement of cells lost as a result of disease or damage. Independently, studies aimed at direct genetic therapy in model systems have recently begun to suggest conceptually new approaches to the treatment of several kinds of human genetic disease, especially those caused by single gene enzyme deficiencies. We suggest that a combination of these two approaches, namely the graftment into the CNS of genetically modified cells, may provide a new approach toward the restoration of some functions in the damaged or diseased CNS. We present evidence for the feasibility of this approach, including a description of some current techniques for mammalian cell gene transfer and CNS grafting, and several possible approaches to clinical applications. Specifically, we report that fibroblasts, genetically modified to secrete NGF by infection with a retroviral vector and implanted into the brains of rats with a surgical lesion of the fimbria-fornix, prevented the degeneration of cholinergic neurons that would die without treatment.