Neural stem cells (NSCs) are multipotent stem cells with remarkable self‐renewal potential and also unique competencies to differentiate into neurons, astrocytes, and oligodendrocytes (ODCs) and improve the cellular microenvironment. In addition, NSCs secret diversity of mediators, including neurotrophic factors (e.g., BDNF, NGF, GDNF, CNTF, and NT‐3), pro‐angiogenic mediators (e.g., FGF‐2 and VEGF), and anti‐inflammatory biomolecules. Thereby, NSCs transplantation has become a reasonable and effective treatment for various neurodegenerative disorders by their capacity to induce neurogenesis and vasculogenesis and dampen neuroinflammation and oxidative stress. Nonetheless, various drawbacks such as lower migration and survival and less differential capacity to a particular cell lineage concerning the disease pathogenesis hinder their application. Thus, genetic engineering of NSCs before transplantation is recently regarded as an innovative strategy to bypass these hurdles. Indeed, genetically modified NSCs could bring about more favored therapeutic influences post‐transplantation in vivo, making them an excellent option for neurological disease therapy. This review for the first time offers a comprehensive review of the therapeutic capability of genetically modified NSCs rather than naïve NSCs in neurological disease beyond brain tumors and sheds light on the recent progress and prospect in this context.