Neurodegenerative diseases are characterized by a gradual loss of cognitive and physical functions. Medications for these disorders are limited and treat the symptoms only. There are no disease-modifying therapies available, which have been shown to slow or stop the continuing loss of neurons. Transdifferentiation, whereby somatic cells are reprogrammed into another lineage without going through an intermediate proliferative pluripotent stem cell stage, provides an alternative strategy for regenerative medicine and disease modeling. In particular, the transdifferentiation of somatic cells into specific subset of patient-specific neuronal cells offers alternative autologous cell therapeutic strategies for neurodegenerative disorders and presents a rich source of using diverse somatic cell types for relevant applications in translational, personalized medicine, as well as human mechanistic study, new drug-target identification, and novel drug screening systems. Here, we provide a comprehensive overview of the recent development of transdifferentiation research, with particular attention to chemical-induced transdifferentiation and perspectives for modeling and treatment of neurodegenerative diseases.