The rationale for use of adult stem cells as a treatment for neurological diseases such as multiple sclerosis arose from the hope that they had the capacity to foster repair of the CNS through tissue integration and differentiation into neural cells. Evidence from preclinical studies suggested that mesenchymal stem cells (MSCs), a subset of adult progenitor cells, are an effective therapy in preclinical animal models of neurological diseases such as experimental autoimmune encephalomyelitis, a model for multiple sclerosis, and stroke. In experimental autoimmune encephalomyelitis, intravenous injection of MSCs ameliorates clinical course and decreases demyelination, immune infiltrates, and axonal loss. Surprisingly, these effects do not require full CNS engraftment by MSCs, but rely on the capacity of MSCs to inhibit pathogenic immune responses and release neuroprotective and pro-oligodendrogenic molecules favouring tissue repair. These results led to the conclusion that therapeutic use of MSCs should initially focus on individuals with multiple sclerosis and persistent inflammation. Small clinical studies in different neurological diseases have suggested that MSCs are safe, paving the road for larger phase 2 studies addressing the effect of MSCs on clinical outcomes and markers of disease activity.