Stroke remains a significant unmet condition in the USA and throughout the world. To date, only approximately 3% of the population suffering an ischemic stroke benefit from the thrombolytic drug tissue plasminogen activator, largely due to the drug's narrow therapeutic window. The last decade has witnessed extensive laboratory studies suggesting the therapeutic potential of cell-based therapy for stroke. Limited clinical trials of cell therapy in stroke patients are currently being pursued. Bone marrow-derived stem cells are an attractive, novel transplantable cell source for stroke. There remain many unanswered questions in the laboratory before cell therapy can be optimized for transplantation in the clinical setting. Here, we discuss the various translational hurdles encountered in bringing cell therapy from the laboratory to the clinic, using stem cell therapeutics as an emerging paradigm for stroke as a guiding principle. In particular, we focus on the preclinical studies of cell transplantation in experimental stroke with emphasis on a better understanding of mechanisms of action in an effort to optimize efficacy and to build a safety profile for advancing cell therapy to the clinic. A forward looking strategy of combination therapy involving stem cell transplantation and pharmacologic treatment is also discussed.