It is well known that bone marrow stromal cells (BMSC) grafted into the hippocampus of the rat model of Alzheimer's disease (AD) could survive and differentiate into cholinergic neurons as well as contribute towards functional restoration. The present study evaluated the effects of BMSC as a seed cell modified by nerve growth factor (NGF) gene into the hippocampus of AD rats. The beta-amyloid protein was injected bilaterally into the rat hippocampus to reproduce the AD model. After the human total RNA was extracted, the NGF gene was amplified by reverse transcription-polymerase chain reaction, then cloned into the pcDNA3. BMSC derived from a green fluorescence protein transgenic mouse were isolated, cultured, identified, and transfected by the NGF recombinant. The NGF-gene-modified BMSC were then transplanted into the hippocampus of AD rats. The results showed that implanted BMSC survived, migrated and expressed NGF as well as differentiated into ChAT-positive neurons. A significant improvement in learning and memory in AD rats was also seen in NGF-gene-modified BMSC group, when compared with the BMSC group. The present findings suggested that BMSC provided an effective carrier for delivery of NGF into AD rats, and the administration of NGF-gene-modified BMSC may be considered as a potential strategy for the development of effective therapies for the treatment of AD.