Recent studies have shown that many kinds of stem cells are beneficial for patients suffering with neurodegenerative diseases. We investigated the effects of neural stem cell (NSC), Maudsley hippocampal clone 36 (MHP36) in the Niemann-Pick disease type C (NP-C) model mice. Herein, we demonstrate that MHP36 transplantation improves the neuropathological features without acute immune response and promotes neuronal networks with functional synaptic transmission. The number of surviving Purkinje neurons substantially increased in MHP36 transplanted NP-C mice compared with sham-transplanted NP-C mice. MHP36 significantly reduced both of astrocytic and microglial activations. We also found that these surviving Purkinje neurons have normal functional synapses with parallel fibers that have normal glutamate release probability in MHP36 transplanted NP-C mice. Furthermore, real-time PCR analysis revealed up-regulation of genes involved in both excitatory and inhibitory neurotransmission encoding subunits of the ionotropic glutamate receptors GluR2, 3 and GABAA receptor beta2. These findings suggest that NSC, MHP36 transplantation may have therapeutic effects in the treatment of NP-C and other neurodegenerative diseases.