Alzheimer's disease (AD) causes brain degeneration, primarily depleting cholinergic cells, and leading to cognitive and learning dysfunction. Logically, to augment the cholinergic cell loss, a viable treatment for AD has been via drugs boosting brain acetylcholine production. However, this is not a curative measure. To this end, nerve growth factor (NGF) has been examined as a possible preventative treatment against cholinergic neuronal death while enhancing memory capabilities; however, NGF brain bioavailability is challenging as it does not cross the blood–brain barrier. Investigations into stem cell- and gene-based therapy have been explored in order to enhance NGF potency in the brain. Along this line of research, a genetically modified cell line, called HB1.F3 transfected with the cholinergic acetyltransferase or HB1.F3.ChAT cells, has shown safety and efficacy profiles in AD models. This stem cell transplant therapy for AD is an extension of the neural stem cells' use in other neurological treatments, such as Parkinson's disease and stroke, and recently extended to cancer. The HB1 parent cell and its associated cell lines have been used as a vehicle to deliver genes of interest in various neurological models, and are highly effective as they can differentiate into neurons and glial cells. A focus of this mini-review is the recent demonstration that the transplantation of HB1.F3.ChAT cells in an AD animal model increases cognitive function coinciding with upregulation of acetylcholine levels in the cerebrospinal fluid. In addition, there is a large dispersion throughout the brain of the transplanted stem cells which is important to repair the widespread cholinergic cell loss in AD. Some translational caveats that need to be satisfied prior to initiating clinical trials of HB1.F3.ChAT cells in AD include regulating the host immune response and the possible tumorigenesis arising from the transplantation of this genetically modified cell line. Further studies are warranted to test the safety and effectiveness of these cells in AD transgenic animal models. This review highlights the recent progress of stem cell therapy in AD, not only emphasizing the significant basic science strides made in this field, but also providing caution on remaining translational issues necessary to advance this novel treatment to the clinic.