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To review recent developments in the application of stem cells for transplantation therapies in neurodegenerative diseases.Stem cell transplantation has the potential to improve function by replacing cells lost to the disease and reconstructing elements of neural circuitry or by providing support for host cells (e.g. by secretion of trophic factors). Other mechanisms, such as modulation of the immune system by bone marrow stem cell transplantation, pertinent to conditions such as multiple sclerosis, are emerging as therapies but will not be discussed here. There have been substantial advances in our understanding of stem cell biology and some recent important advances in controlling their differentiated phenotype. Using stem cells to provide trophic support places less stringent requirements on the cells and this is the area in which many of the first clinical studies are taking place.There are real prospects of stem cell technology having a place in clinical management of neurodegenerative conditions, but directing the differentiation of stem cells towards the appropriate neural phenotype remains a challenge. This is a relatively new and rapidly evolving area, and caution should be applied when advising patients.