The brain, unlike many tissues, has a limited capacity for self-repair and so there has been great interest in the possibility of transplanting neural cells to replace those lost through injury or disease. Encouraging research in humans is already underway examining the possibility of neural cell replacement in adult neurodegenerative conditions such as Parkinson's disease and Huntington disease. In addition, experiments exploring neural stem cell replacement in rodent models of acute stroke, demyelination and spinal cord injury have demonstrated functional improvements in treated animals. When considering perinatal neural stem cell therapy, it should not be overlooked that the immature, developing brain might provide a more favourable environment for stem cell integration. However, considerable advances need to be made both in understanding the basic biology of neural stem cells, including the instructive signals that determine their proliferation and differentiation, and in characterising their responses when transplanted in a damaged or diseased area of the brain.