Alzheimer's disease (AD) causes degeneration of brain neurons and leads to memory loss and cognitive impairment. Since current therapeutic strategies cannot cure the disease, stem cell therapy represents a powerful tool for the treatment of AD. We first review the advances in molecular pathogenesis and animal models of AD and then discuss recent clinical studies using small molecules and immunoglobulins to target amyloid-beta plaques for AD therapy. Finally, we discuss stem cell therapy for AD using neural stem cells, olfactory ensheathing cells, embryonic stem cells, and mesenchymal stem cell from bone marrow, umbilical cord, and umbilical cord blood. In particular, patient-specific induced pluripotent stem cells are proposed as a future treatment for AD.