In regenerative medicine, stem cells are currently considered ideal candidates for the treatment of diseases and injuries of the nervous system, for which, at present, there are no effective treatments. Promising results have been shown by clinical trials for neurodegenerative diseases such as Parkinson's diseases, but also for demyelinising disorders and traumatic lesions of the brain and spinal cord. The proof-of-principle is that the replacement of damaged cells and the restoration of function can be accomplished by the transplantation of embryonic or adult stem cells. Advancements in stem cell biology were recently propelled by the ability to generate induced pluripotent stem (iPS) cells from fibroblasts of several neurodegenerative diseases (e.g. Parkinson's and Huntington's diseases, Amyotrophic Lateral Sclerosis and Spinal Muscular Atrophy). In this review, we discuss the molecular basis of stem cell therapy and the advancement of research on regenerative medicine for diseases and injuries of the nervous system.