Electrical stimulation has been used for decades in devices such as pacemakers, cochlear implants and more recently for deep brain and retinal stimulation and electroceutical treatment of disease. However, current spread from the electrodes limits the precision of neural activation, leading to a low quality therapeutic outcome or undesired side-effects. Alternative methods of neural stimulation such as optical stimulation offer the potential to deliver higher spatial resolution of neural activation. Direct optical stimulation is possible with infrared light, while visible light can be used to activate neurons if the neural tissue is genetically modified with a light sensitive ion channel. Experimentally, both methods have resulted in highly precise stimulation with little spread of activation at least in the cochlea, each with advantages and disadvantages. Infrared neural stimulation does not require modification of the neural tissue, but has very high power requirements. Optogenetics can achieve precision of activation with lower power, but only in conjunction with targeted insertion of a light sensitive ion channel into the nervous system via gene therapy. This review will examine the advantages and limitations of optical stimulation of neural tissue, using the cochlea as an exemplary model and recent developments for retinal and deep brain stimulation.