Parkinson's disease (PD) is a severe deliberating neurological disease caused by progressive degenerative death of dopaminergic neurons in the substantia nigra of midbrain. While cell replacement strategy by transplantation of neural stem cells and inducement of dopaminergic neurons is recommended for the treatment of PD, understanding the differentiation mechanism and controlled proliferation of grafted stem cells remain major concerns in their clinical application. Here we review recent studies on molecular signaling pathways in regulation of dopaminergic differentiation and proliferation of stem cells, particularly Wnt/beta-catenin signaling in stimulating formation of the dopaminergic phenotype, Notch signaling in inhibiting stem cell differentiation, and Sonic hedgehog functioning in neural stem cell proliferation and neuronal cell production. Activation of oncogenes involved in uncontrolled proliferation or tumorigenicity of stem cells is also discussed. It is proposed that a selective molecular manipulation targeting strategy will greatly benefit cell replacement therapy for PD by effectively promoting dopaminergic neuronal cell generation and reducing risk of tumorigenicity of in vivo stem cell applications.