Embryonic stem (ES) cells, which are derived from the inner cell mass of mammalian blastocyst stage embryos, have the ability to differentiate into any cell type in the body and to grow indefinitely while maintaining pluripotency. During development, cells undergo progressive and irreversible differentiation into specialized adult cell types. Remarkably, in spite of this restriction in potential, adult somatic cells can be reprogrammed and returned to the naive state of pluripotency found in the early embryo simply by forcing expression of a defined set of transcription factors. These induced pluripotent stem (iPS) cells are molecularly and functionally equivalent to ES cells and provide powerful in vitro models for development, disease, and drug screening, as well as material for cell replacement therapy. Since functional impairment results from cell loss in most central nervous system (CNS) diseases, recovery of lost cells is an important treatment strategy. Although adult neurogenesis occurs in restricted regions, the CNS has poor potential for regeneration to compensate for cell loss. Thus, cell transplantation into damaged or diseased CNS tissues is a promising approach to treating various neurodegenerative disorders. Transplantation of photoreceptors or retinal pigment epithelium cells derived from human ES cells can restore some visual function. Patient-specific iPS cells may lead to customized cell therapy. However, regeneration of retinal function will require a detailed understanding of eye development, visual system circuitry, and retinal degeneration pathology. Here, we review the current progress in retinal regeneration, focusing on the therapeutic potential of pluripotent stem cells.