Stem cells are widely believed to have significant potential in the treatment of human disease. Comments such as '[stem cells]...could prove the Holy Grail in finding treatments for cancer, Parkinson's disease, diabetes, osteoporosis, spinal cord injuries, Alzheimer's disease, leukaemia and multiple sclerosis...transform[ing] the lives of hundreds of thousands of people' (Yvette Cooper, Public Health minister, quoted in The Times, December 16 2000, authors' italics) serve to reinforce the extraordinary expectations of stem cells, particularly in neurological disease. Stem cells, traditionally defined as clone forming, self-renewing, pluripotent, progenitor cells, have already proved themselves to be an invaluable source of transplantation material in several clinical settings, most notably malignant haematology, and attention is now turning to a wider variety of diseases in which there may be potential for therapeutic intervention with stem cell transplantation. Neurological diseases have been highlighted as a priority and this is understandable given their unenviable reputation for relentless progression and the paucity of disease-modifying treatments. However, it is important that the potential of stem cells to treat neurological disease is critically appraised if the hopes of patients and doctors are not to be raised without foundation.