During human development, cells of the blastocyst inner cell mass proliferate and give rise to each cell in the human body. It is that potential which focuses intense interest on these stem cells as a substrate for cell-based regenerative medicine. An increased understanding of the interrelation of processes that govern the formation of various cell types will allow for the directed differentiation of stem cells into specified cells or tissues that can ameliorate the effects of disease or damage. Perhaps the most difficult cells and tissues to derive for use in cell replacement strategies are the diverse neurons, glia and complex networks of the central nervous system (CNS). Here we present emerging perspectives on the development of neuronal and glial cells from stem cells for clinical application to CNS diseases and injury.