Mesenchymal stem cells (MSCs) have been proposed as an alternative therapy to be applied into several pathologies of the nervous system. These cells can be obtained from adipose tissue, umbilical cord blood and bone marrow, among other tissues, and have remarkable therapeutic properties. MSCs can be isolated with high yield, which adds to their ability to differentiate into non-mesodermal cell types including neuronal lineage both in vivo and in vitro. They are able to restore damaged neural tissue, thus being suitable for the treatment of neural injuries, and possess immunosuppressive activity, which may be useful for the treatment of neurological disorders of inflammatory etiology. Although the long-term safety of MSC-based therapies remains unclear, a large amount of both pre-clinical and clinical trials have shown functional improvements in animal models of nervous system diseases following transplantation of MSCs. In fact, there are several ongoing clinical trials evaluating the possible benefits this cell-based therapy could provide to patients with neurological damage, as well as their clinical limitations. In this review we focus on the potential of MSCs as a therapeutic tool to treat neurological disorders, summarizing the state of the art of this topic and the most recent clinical studies.