Multiple sclerosis (MS) is a chronic inflammatory, autoimmune, and neurodegenerative disease of the central nervous system (CNS). It is characterized by demyelination and neuronal loss that is induced by attack of autoreactive T cells to the myelin sheath and endogenous remyelination failure, eventually leading to functional neurological disability. Although recent evidence suggests that MS relapses are induced by environmental and exogenous triggers such as viral infections in a genetic background, its very complex pathogenesis is not completely understood. Therefore, the efficiency of current immunosuppression-based therapies of MS is too low, and emerging disease-modifying immunomodulatory agents such as fingolimod and dimethyl fumarate cannot stop progressive neurodegenerative process. Thus, the cell replacement therapy approach that aims to overcome neuronal cell loss and remyelination failure and to increase endogenous myelin repair capacity is considered as an alternative treatment option. A wide variety of preclinical studies, using experimental autoimmune encephalomyelitis model of MS, have recently shown that grafted cells with different origins including mesenchymal stem cells (MSCs), neural precursor and stem cells, and induced-pluripotent stem cells have the ability to repair CNS lesions and to recover functional neurological deficits. The results of ongoing autologous hematopoietic stem cell therapy studies, with the advantage of peripheral administration to the patients, have suggested that cell replacement therapy is also a feasible option for immunomodulatory treatment of MS. In this chapter, we overview cell sources and applications of the stem cell therapy for treatment of MS. We also discuss challenges including those associated with administration route, immune responses to grafted cells, integration of these cells to existing neural circuits, and risk of tumor growth. Finally, future prospects of stem cell therapy for MS are addressed.