The discovery of the therapeutic potential of stem cells offers new opportunities for the treatment of incurable neurological diseases. Based on their biological properties, stem cells act as manufacturers, maintaining the cellular tissue/organ homeostasis in physiological and pathological conditions. Thus, stem cell replacement therapy for central and peripheral nervous system disorders aims at repopulating the affected neural tissue with new neurons, as well as with other neural cells. In this review, we will report on investigations that are raising the promise and the understanding of the challenges behind translating stem cell biology into a novel clinical therapeutic potential for central and peripheral nervous system diseases.