In recent years much excitement has been generated over the possibility that adult stem cells may attempt repair of the injured central nervous system (CNS), thus setting the stage for their utilisation in the treatment of neurodegenerative disorders. Recent studies have shown that some subsets of stem cells can also modulate the (auto)immune response, thus providing a rationale for their use as therapy for experimental autoimmune encephalomyelitis (EAE), an animal model for multiple sclerosis (MS). This article reviews the scientific evidence supporting the possible use of neural stem cells (NSCs) and mesenchymal stem cells (MSCs) for the treatment of MS. In addition, possible mechanisms sustaining the beneficial mode of action of haematopoietic stem cells (HSCs) following transplantation in MS individuals are discussed. Overall, it is proposed that limited subsets of adult stem cells may have a dual function that may be effective for the treatment of MS, an autoimmune disease of the CNS where degeneration of neural cells follows inflammation.