Stem cell-based therapies have emerged as a promising approach for treating various neurological disorders by harnessing the regenerative potential of stem cells to restore damaged neural tissue and circuitry. This comprehensive review provides an in-depth analysis of the current state of stem cell applications in primary neurological conditions, including Parkinson's disease (PD), Alzheimer's disease (AD), amyotrophic lateral sclerosis (ALS), multiple sclerosis (MS), stroke, spinal cord injury (SCI), and other related disorders. The review begins with a detailed introduction to stem cell biology, discussing the types, sources, and mechanisms of action of stem cells in neurological therapies. It then critically examines the preclinical evidence from animal models and early human trials investigating the safety, feasibility, and efficacy of different stem cell types, such as embryonic stem cells (ESCs), mesenchymal stem cells (MSCs), neural stem cells (NSCs), and induced pluripotent stem cells (iPSCs). While ESCs have been studied extensively in preclinical models, clinical trials have primarily focused on adult stem cells such as MSCs and NSCs, as well as iPSCs and their derivatives. We critically assess the current state of research for each cell type, highlighting their potential applications and limitations in different neurological conditions. The review synthesizes key findings from recent, high-quality studies for each neurological condition, discussing cell manufacturing, delivery methods, and therapeutic outcomes. While the potential of stem cells to replace lost neurons and directly reconstruct neural circuits is highlighted, the review emphasizes the critical role of paracrine and immunomodulatory mechanisms in mediating the therapeutic effects of stem cells in most neurological disorders. The article also explores the challenges and limitations associated with translating stem cell therapies into clinical practice, including issues related to cell sourcing, scalability, safety, and regulatory considerations. Furthermore, it discusses future directions and opportunities for advancing stem cell-based treatments, such as gene editing, biomaterials, personalized iPSC-derived therapies, and novel delivery strategies. The review concludes by emphasizing the transformative potential of stem cell therapies in revolutionizing the treatment of neurological disorders while acknowledging the need for rigorous clinical trials, standardized protocols, and multidisciplinary collaboration to realize their full therapeutic promise.