Alzheimer's disease is characterized by degeneration and dysfunction of synapses and neurons in brain regions critical for learning and memory functions. The endogenous generation of new neurons in certain regions of the mature brain, derived from primitive cells termed neural stem cells, has raised hope that neural stem cells may be recruited for structural brain repair. Stem cell therapy has been suggested as a possible strategy for replacing damaged circuitry and restoring learning and memory abilities in patients with Alzheimer's disease. In this review, we outline the promising investigations that are raising hope, and understanding the challenges behind translating underlying stem cell biology into novel clinical therapeutic potential in Alzheimer's disease.