Neuroinflammation is a critical event that responds to disturbed homeostasis and governs various neurological diseases in the central nervous system (CNS). The excessive inflammatory microenvironment in the CNS can adversely affect endogenous neural stem cells, thereby impeding neural self-repair. Therapies with neural stem/progenitor cells (NSPCs) have shown significant inhibitory effects on inflammation, which is mainly achieved through intercellular contact and paracrine signalings. The intercellular contact between NSPCs and immune cells, the activated CNS- resident microglia, and astrocyte plays a critical role in the therapeutic NSPCs homing and immunomodulatory effects. Moreover, the paracrine effect mainly regulates infiltrating innate and adaptive immune cells, activated microglia, and astrocyte through the secretion of bioactive molecules and extracellular vesicles. However, the molecular mechanism involved in the immunomodulatory effect of NSPCs is not well discussed. This article provides a systematic analysis of the immunomodulatory mechanism of NSPCs, discusses efficient ways to enhance its immunomodulatory ability, and gives suggestions on clinical therapy.