Stem cell therapy may be a suitable approach for the treatment of many neurodegenerative diseases. However, one major impediment to the development of successful cell-based therapies is our limited understanding of the mechanisms that instruct neural stem cell behaviour, such as proliferation and cell fate specification. The β-amyloid precursor protein (APP) of Alzheimer's disease (AD) may play an important role in neural stem cell proliferation and differentiation. Our recent work shows that in vitro, APP stimulates neural stem or progenitor cell proliferation and neuronal differentiation. The effect on proliferation is mediated by an autocrine factor that we have identified as cystatin C. As cystatin C expression is also reported to inhibit the development of amyloid pathology in APP transgenic mice, our finding has implications for the possible use of cystatin C for the therapy of AD.