Alzheimer's disease (AD) is the most common form of dementia in aged populations.AD is characterized by a progressive decline in memory and cognitive function, accompanied with behavioral changes such as confusion, irritability and aggression, mood swings, language breakdown and eventually long-term memory loss. The most significantly pathological findings in the brains affected by AD are senile plaques (SP), neurofibrillary tangles (NFT) and neuronal loss or degeneration, particularly in the areas connected to the cerebral cortex and hippocampus.The most prominence among these regions is the basal forebrain cholinergic neurons. Many AD studies and clinical trials focus on inhibiting the formation of extracellular senile plaques and intracellular neurofibrillary tangles to prevent or halt disease progression. For example, the Food and Drug Association (FDA) has approved three acetylcholinesterase inhibitors (AChEIs), donepezil, rivastigmine and galantamine as AD therapy. Elevating the neurotransmitter acetylcholine by AChEIs has been shown to benefit cognitive functions in patients. Excitotoxicity caused by glutamatergic synaptic dysfunction contributes to cognitive AD symptoms. Another FDA-approved AD drug, the N-methyl-D-aspartate (NMDA) receptor antagonist memantine, is thought to alleviate the excitotoxicity. To date, however, none of these treatments have been shown to be safe and effective in clinic. Stem cell therapy is a promising therapeutic strategy, which has been shown to replace the neurodegenerative cholinergic neurons and provide exogenous neurotrophic factors in AD brains. Stem cells have been used as therapy of neurodegenerative diseases to deliver RNAi to the brains and regulate the expression of neprilysin, an amyloid-β (Aβ)-degrading enzyme. More recently, stem cells, especially induced pluripotent stem cells (IPSCs), have been used for AD modeling and drug screening. However, effective drugs or other interventions that stop or delay progression of AD remain elusive. Due to the multifaceted features of AD, further investigations of AD therapies are necessary. This review will discuss the recent progress of stem cell strategies for AD modeling and therapy.