Recent advances in stem cell technology are expanding our ability to replace a variety of cells throughout the body. In the past, neurological diseases caused by the degeneration of neuronal cells were considered incurable because of a long-held 'truism'; neurons do not regenerate during adulthood. However, this statement has been challenged, and we have now found much evidence that the brain is indeed capable of regenerating neurons after maturing. Based on this new concept, researchers have shown neural differentiation of stem cells and recovery of function following transplantation of these cells into the brain. These results may promise a bright future for clinical applications of stem cell strategies in neurological diseases; however, we must consider the pathophysiological environments of individual diseases that may affect stem cell biology. Before we begin to develop clinical applications, we must consider environmental factors that have not been discussed in the current preclinical studies. Here, we study cases of Alzheimer's disease and schizophrenia and discuss the effects of environmental factors under disease conditions.