Stem cell transplantation through cell replacement or as vector for gene delivery is a potential strategy for the treatment of neurodegenerative diseases. Several studies have reported the transdifferentiation of different somatic stem cells into neurons in vitro or after transplantation into animal models. This observation has pointed out the perspective of using an ethical and accessible cell source to ”replace“ damaged neurons or provide support to brain tissue. However, recent findings such as the cell fusion phenomenon have raised some doubts about the real existence of somatic stem cell plasticity. In this review, we will discuss current evidence and controversial issues about the neuroneogenesis from various sources of somatic cells focusing on the techniques of isolation, expansion in vitro as well as the inductive factors that lead to transdifferentiation in order to identify the factors peculiar to this process. The morphological, immunochemical, and physiological criteria to correctly judge whether the neuronal transdifferentation occurred are critically presented. We will also discuss the transplantation experiments that were done in view of a possible clinical therapeutic application. Animal models of stroke, spinal cord and brain trauma have improved with Mesenchymal Stem Cells or Bone Marrow transplantation. This improvement does not seem to depend on the replacement of the lost neurons but may be due to increased expression levels of neurotrophic factors, thus suggesting a beneficial effect of somatic cells regardless of transdifferentiation. Critical understanding of available data on the mechanisms governing the cell fate reprogramming is a necessary achievement toward an effective cell therapy.