Hepatic encephalopathy and other neurodegenerative disorders have profound implications for extensive liver impairment, calling for new ways of treating the condition. The application of stem cell transplantation to treat these severe disorders is a new and encouraging technique. This review article digs deep into the subject of stem cell transplantation therapy, neurodegenerative disorders associated with advanced liver damage, and liver transplantation. It comprehensively analyses the background, rationale, scope, and objectives of using stem cells to treat such challenging conditions. The topic of discussion includes the subtleties of neurodegenerative disorders, the function of liver transplantation, and the possible advantages and disadvantages associated with it. The relevance of patient selection, intraoperative concerns and post-transplant care is discussed. Further, the article explores how stem cell-based therapies can benefit from nanotechnology, specifically how it can improve stem cell distribution, survival, and integration for better therapeutic results. This review aims to offer a thorough analysis of regenerative medicine’s present and future possibilities in dealing with the intricate relationship between neurodegeneration and liver damage. It does this by examining the efficacy, safety, and long-term impacts of stem cell transplantation in treating neurodegenerative disorders associated with advanced liver damage. This will incorporate insights from ongoing clinical trials, the patent landscape, and future directions. The goal is to pave the way for innovative and personalized treatment approaches in this evolving research and clinical practice field. Therefore, these efforts represent a promising frontier in medical research that can alleviate the burden of HE and associated neurological complications combined with liver cirrhosis.