Compelling evidence exists that neural stem cell-based therapies protect the central nervous system (CNS) from chronic inflammatory degeneration, such as that occurring in experimental autoimmune encephalomyelitis and stroke. It was first assumed that stem cells directly replace lost cells but it is now becoming clearer that they might be able to protect the nervous system through mechanisms other than cell replacement. In immune-mediated experimental demyelination and stroke, transplanted neural stem/precursor cells (NPCs) are able to mediate efficient bystander myelin repair and axonal rescue. This is dependent on multiple capacities that transplanted NPCs exhibit within specific microenvironments after transplantation. However, a comprehensive understanding of the mechanisms by which NPCs exert their therapeutic impact is lacking. Here we will review some of the most recent evidence--and discuss some of the likely mechanisms--that support the remarkable capacity of NPCs to cross-talk with endogenous cells and to remodel the injured nervous system when applied as novel therapeutic regimes. We foresee that the exploitation of the innate mechanisms regulating these modalities of cell-to-cell communication has realistic chances of revolutionizing most of the actual understanding of stem cell biology and its application to regenerative medicine and CNS repair.