We have found much evidence that the brain is capable of regenerating neurons after maturation. In our previous study, human neural stem cells (HNSCs) transplanted into aged rat brains differentiated into neural cells and significantly improved the cognitive functions of the animals, indicating that HNSCs may be a promising candidate for cell-replacement therapies for neurodegenerative diseases including Alzheimer's disease (AD). However, ethical and practical issues associated with HNSCs compel us to explore alternative strategies. Here, we report novel technologies to differentiate adult human mesenchymal stem cells, a subset of stromal cells in the bone marrow, into neural cells by modifying DNA methylation or over expression of nanog, a homeobox gene expressed in embryonic stem cells. We also report peripheral administrations of a pyrimidine derivative that increases endogenous stem cell proliferation improves cognitive function of the aged animal. Although these results may promise a bright future for clinical applications used towards stem cell strategies in AD therapy, we must acknowledge the complexity of AD. We found that glial differentiation takes place in stem cells transplanted into amyloid-( precursor protein (APP) transgenic mice. We also found that over expression of APP gene or recombinant APP treatment causes glial differentiation of stem cells. Although further detailed mechanistic studies may be required, RNA interference of APP or reduction of APP levels in the brain can significantly reduced glial differentiation of stem cells and may be useful in promoting neurogenesis after stem cell transplantation.