Stem cell-based therapies hold considerable promise for many currently devastating neurological disorders. Substantial progress has been made in the derivation of disease-relevant human donor cell populations. Behavioral data in relevant animal models of disease have demonstrated therapeutic efficacy for several cell-based approaches. Consequently, cGMP grade cell products are currently being developed for first in human clinical trials in select disorders. Despite the therapeutic promise, the presumed mechanism of action of donor cell populations often remains insufficiently validated. It depends greatly on the properties of the transplanted cell type and the underlying host pathology. Several new technologies have become available to probe mechanisms of action in real time and to manipulate in vivo cell function and integration to enhance therapeutic efficacy. Results from such studies generate crucial insight into the nature of brain repair that can be achieved today and push the boundaries of what may be possible in the future.