Damage to hippocampus can occur through many causes including head trauma, ischemia, stroke, status epilepticus and Alzheimer’s disease. Certain changes such as increased levels of neurogenesis and elevated concentrations of multiple neurotrophic factors that ensue in the acute phase after injury seem beneficial for restraining hippocampal dysfunction. However, many alterations that arise in the intermediate to chronic phase after injury such as abnormal migration of newly born neurons, aberrant synaptic reorganization, progressive loss of inhibitory gamma-amino butyric acid positive interneurons including those expressing reelin, greatly declined neurogenesis and sustained inflammation are detrimental. Consequently, the net effect of post-injury plasticity in the hippocampus remains inadequate for promoting significant functional recovery. Hence, ideal therapeutic interventions ought to be efficient for restraining these detrimental changes in order to block the propensity of most hippocampal injuries to evolve into learning deficits, memory dysfunction, depression, and temporal lobe epilepsy. Neural stem cell (NSC) grafting into the hippocampus early after injury appears alluring from this perspective because several recent studies have demonstrated therapeutic value of this intervention, especially for preventing/easing memory dysfunction, depresion and temporal lobe epilepsy development in the chronic phase after injury. These beneficial effects of NSC grafting appeared to be mediated through considerable modulation of aberrant hippocampal post-injury plasticity with additions of new inhibitory gamma-amino butyric acid positive interneurons, and astrocytes secreting a variety of neurotrophic factors and anticonvulsant proteins. This review confers advancements made in NSC grafting therapy for treating hippocampal injury in animal models of excitotoxic injury, traumatic brain injury, Alzheimer’s disease and status epilepticus, potential mechanisms of functional recovery mediated by NSC grafts placed early after hippocampal injury, and issues that need to be resolved prior to considering clinical application of NSC grafting for hippocampal injury.