Alzheimer's disease (AD), a progressive dementia, is one of the world's most dangerous and debilitating diseases. Clinical trial results of amyloid-β (Aβ) and tau regulators based on the pretext of straightforward amyloid and tau immunotherapy were disappointing. There are currently no effective strategies for slowing the progression of AD. Further understanding of the mechanisms underlying AD and the development of novel therapeutic options are critical. Neurogenesis is impaired in AD, which contributes to memory deficits. Transplanted neural stem cells (NSCs) can regenerate degraded cholinergic neurons, and new neurons derived from NSCs can form synaptic connections with neighboring neurons. In theory, employing NSCs to replace and restore damaged cholinergic neurons and brain connections may offer new treatment options for AD. However there remain barriers to surmount before NSC-based therapy can be used clinically. The objective of this article is to describe recent advances in the treatment of AD models and clinical trials involving NSCs. In addition, we discuss the challenges and prospects associated with cell transplant therapy for AD.