Stem cell transplantation has evolved as a promising experimental treatment approach for stroke. In this review, we address the major hurdles for successful translation from basic research into clinical applications and discuss possible strategies to overcome these issues. We summarize the results from present pre-clinical and clinical studies and focus on specific areas of current controversy and research: (i) the therapeutic time window for cell transplantation; (ii) the selection of patients likely to benefit from such a therapy; (iii) the optimal route of cell delivery to the ischemic brain; (iv) the most suitable cell types and sources; (v) the potential mechanisms of functional recovery after cell transplantation; and (vi) the development of imaging techniques to monitor cell therapy.