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Several human neurological disorders such as Parkinson’s disease, Alzheimer’s disease, amyotrophic lateral sclerosis; Huntington’s disease, spinal cord injury, multiple sclerosis, and brain stroke, are caused by the injury to neurons or glial cells. The recent years have witnessed the successful generation of neurons and glia cells driving efforts to develop stem-cell-based therapies for patients to combat a broad spectrum of human neurological diseases. The inadequacy of suitable cell types for cell replacement therapy in patients suffering from neurological disorders have hampered the development of this promising therapeutic approach. Attempts are thus being made to reconstruct viable neurons and glial cells from different stem cells such as the embryonic stem cells, mesenchymal stem cells, and neural stem cells. Dedicated research to cultivate stem cell-based brain transplantation therapies have been carried out. We aim at compiling the breakthroughs in the field of stem cell-based therapy for the treatment of neurodegenerative maladies, emphasizing on the shortcomings faced, victories achieved, and the future prospects of the therapy in clinical settings.