Underlying cognitive declines in Alzheimer's disease (AD) are the result of neuron and neuronal process losses due to a wide range of factors. To date, all efforts to develop therapies that target specific AD-related pathways have failed in late-stage human trials. As a result, an emerging consensus in the field is that treatment of AD patients with currently available drug candidates might come too late, likely as a result of significant neuronal loss in the brain. In this regard, cell-replacement therapies, such as human embryonic stem cell- or induced pluripotent stem cell-derived neural cells, hold potential for treating AD patients. With the advent of stem cell technologies and the ability to transform these cells into different types of central nervous system neurons and glial cells, some success in stem cell therapy has been reported in animal models of AD. However, many more steps remain before stem cell therapies will be clinically feasible for AD and related disorders in humans. In this review, we will discuss current research advances in AD pathogenesis and stem cell technologies; additionally, the potential challenges and strategies for using cell-based therapies for AD and related disorders will be discussed.