Alzheimer’s disease (AD) is the most common neurodegenerative disease caused by eventually aggregated amyloid β (Aβ) plaques in degenerating neurons of the aging brain. These aggregated protein plaques mainly consist of Aβ fibrils and neurofibrillary tangles (NFTs) of phosphorylated tau protein. Even though some cholinesterase inhibitors, NMDA receptor antagonist, and monoclonal antibodies were developed to inhibit neurodegeneration or activate neural regeneration or clear off the Aβ deposits, none of the treatment is effective in improving the cognitive and memory dysfunctions of the AD patients. Thus, stem cell therapy represents a powerful tool for the treatment of AD. In addition to discussing the advents in molecular pathogenesis and animal models of this disease and the treatment approaches using small molecules and immunoglobulins against AD, we will focus on the stem cell sources for AD using neural stem cells (NSCs); embryonic stem cells (ESCs); and mesenchymal stem cells (MSCs) from bone marrow, umbilical cord, and umbilical cord blood. In particular, patient-specific-induced pluripotent stem cells (iPS cells) are proposed as a future prospective and the challenges for the treatment of AD.