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Neurodegenerative diseases are a global health issue with inadequate therapeutic options and an inability to restore the damaged nervous system. With advances in technology, health scientists continue to identify new approaches to the treatment of neurodegenerative diseases. Lost or injured neurons and glial cells can lead to the development of several neurological diseases, including Parkinson’s disease, stroke, and multiple sclerosis. In recent years, neurons and glial cells have successfully been generated from stem cells in the laboratory utilizing cell culture technologies, fueling efforts to develop stem cell-based transplantation therapies for human patients. When a stem cell divides, each new cell has the potential to either remain a stem cell or differentiate into a germ cell with specialized characteristics, such as muscle cells, red blood cells, or brain cells. Although several obstacles remain before stem cells can be used for clinical applications, including some potential disadvantages that must be overcome, this cellular development represents a potential pathway through which patients may eventually achieve the ability to live more normal lives. In this review, we summarize the stem cell-based therapies that have been explored for various neurological disorders, discuss the potential advantages and drawbacks of these therapies, and examine future directions for this field.