Objective: Stem cell-based therapies are promising in regenerative medicine for protecting and repairing damaged brain tissues after injury or in the context of chronic diseases. Hypoxia can induce physiological and pathological responses. A hypoxic insult might act as a double-edged sword, it induces cell death and brain damage, but on the other hand, sublethal hypoxia can trigger an adaptation response called hypoxic preconditioning or hypoxic tolerance that is of immense importance for the survival of cells and tissues. Data Sources: This review was based on articles published in PubMed databases up to August 16, 2017, with the following keywords: “stem cells,” “hypoxic preconditioning,” “ischemic preconditioning,” and “cell transplantation.” Study Selection: Original articles and critical reviews on the topics were selected. Results: Hypoxic preconditioning has been investigated as a primary endogenous protective mechanism and possible treatment against ischemic injuries. Many cellular and molecular mechanisms underlying the protective effects of hypoxic preconditioning have been identified. Conclusions: In cell transplantation therapy, hypoxic pretreatment of stem cells and neural progenitors markedly increases the survival and regenerative capabilities of these cells in the host environment, leading to enhanced therapeutic effects in various disease models. Regenerative treatments can mobilize endogenous stem cells for neurogenesis and angiogenesis in the adult brain. Furthermore, transplantation of stem cells/neural progenitors achieves therapeutic benefits via cell replacement and/or increased trophic support. Combinatorial approaches of cell-based therapy with additional strategies such as neuroprotective protocols, anti-inflammatory treatment, and rehabilitation therapy can significantly improve therapeutic benefits. In this review, we will discuss the recent progress regarding cell types and applications in regenerative medicine as well as future applications.