Schizophrenia is a severe psychiatric disorder associated with emotional, behavioral, and cognitive impairment. The World Health Organization (W.H.O) ranks the illness as one of the top ten diseases contributing to the global health burden. The disease is characterized by positive symptoms, including hallucinations and delusions, alongside negative symptoms, including apathy and social withdrawal, as well as other cognitive impairments. Beyond these clinical features, there is a growing body of evidence that neurodevelopmental abnormalities, neuroinflammation, synaptic connectivity, and neurogenesis deficits are connected to schizophrenia. Traditional therapies for the mental disorder prioritize symptom control over neurological repair. Through mechanisms including immune modulation, synaptic rehabilitation, and neuronal replacement, stem cell therapy introduces the potential for an innovative investigational approach to modulate biological processes implicated in the neuropathology of schizophrenia. This study examines the current state of preclinical and clinical research on stem cell therapy in the neurological repair treatment of schizophrenia, compares the therapeutic potential of different stem cell types, and discusses barriers to clinical application.