Reports of functional recovery from spinal cord injury after the transplantation of rat fetus-derived neural stem cells and embryonic stem cells has raised great expectations for the successful clinical use of stem cell transplantation therapy. However, the ethical issues involved in destroying human embryos or fertilized oocytes to obtain stem cells have been a major obstacle to developing clinically useful stem cell sources, and the transplantation of stem cells isolated from other human embryonic tissues has not yet been developed for use in clinical applications. Recently, induced pluripotent stem cells, which can serve as a source of cells for autologous transplantation, have been attracting a great deal of attention as a clinically viable alternative to stem cells obtained directly from tissues. In this review, we outline the neural induction of mouse embryonic stem cells and induced pluripotent stem cells, their therapeutic efficacy in spinal cord injury, and their safety in vivo.