Neural tissue has historically been regarded as having poor regenerative capacity but recent advances in the growing fields of tissue engineering and regenerative medicine have opened new hopes for the treatment of nerve injuries and neurodegenerative disorders. Adipose tissue has been shown to contain a large quantity of adult stem cells (ASC). These cells can be easily harvested with low associated morbidity and because of their potential to differentiate into multiple cell types, their use has been suggested for a wide variety of therapeutic applications. In this review we examine the evidence indicating that ASC can stimulate nerve regeneration by both undergoing neural differentiation and through the release of a range of growth factors. We also discuss some of the issues that need to be addressed before ASC can be developed as an effective cellular therapy for the treatment of neural tissue disorders.