Increase in life expectancy has put neurodegenerative diseases on the rise. Amongst these, degenerative diseases involving hippocampus like Alzheimer's disease (AD) and temporal lobe epilepsy (TLE) are ranked higher as it is vulnerable to excitotoxicity induced neuronal dysfunction and death resulting in cognitive impairment. Modern medicines have not succeeded in halting the progression of these diseases rendering them incurable and often fatal. Under such scenario, regenerative studies employing stem cells or their by-products in animal models of AD and TLE have yielded encourageing results. This review focuses on the distinct cell types, such as hippocampal cell lines, neural precursor cells, embryonic stem cells derived neural precursor cells, induced pluripotent stem cells, induced neurons and mesenchymal stem cells, which can be employed to rescue hippocampal functions in neurodegenerative diseases like AD and TLE. Besides, the divergent mechanisms through which cell based therapy confer neuroprotection, current impediments and possible improvements in stem cell transplantation strategies are discussed. Authors are aware of the voluminous literature available on this issue and have made a sincere attempt to put forth the current status of research in the field of cell based therapy concurrently discussing the promise it holds for combating neurodegenerative diseases like AD and TLE in the near future. Copyright © 2015 John Wiley & Sons, Ltd.