There have been substantial advances in neonatal medical care over the past two decades that have resulted in the increased survival of very low birth weight infants, survival that in some centers extends to 22 weeks gestational age. Despite these advances, there continues to be significant morbidity associated with extreme preterm birth that includes both short-term and long-term pulmonary and neurologic consequences. No single therapy has proven to be effective in preventing or treating either developmental lung and brain injuries in preterm infants or the hypoxic-ischemic injury that can be inflicted on the full-term brain as a result of in utero or perinatal complications. Stem cell-based therapies are emerging as a potential paradigm-shifting approach for such complex diseases with multifactorial etiologies, but a great deal of work is still required to understand the role of stem/progenitor cells in normal development and in the repair of injured tissue. This review will summarize the biology of the various stem/progenitor cells, their effects on tissue repair in experimental models of lung and brain injury, the recent advances in our understanding of their mechanism of action, and the challenges that remain to be addressed before their eventual application to clinical care.