In the last two decades, neurotransplantation has gained the status of a potentially valuable treatment option in various central nervous system (CNS) disorders. This technique has provided considerable functional improvement in animal models of neurodegenerative diseases, stroke and trauma. In order to make the best therapeutic use of this treatment option, mechanisms of neurotransplantation-induced recovery need to be better understood. Specific interactions of transplants with the recipient brain, which are prominent in embryonic neural cell grafts, include formation of synapses between grafted neurons and recipient neuronal population with controled release of neurotransmitters. Production and release of specific trophic substances for the recipient neurons by the grafted cells also play a considerable role in some transplants. In the above cases, the functional recovery seems to correlate well with the number of surviving cells in the transplant. There is, however, another component to the graft-induced recovery, best: revealed in those graft recipients who display functional improvement although only few or no grafted cells can be found at the post mortem analysis. While psychological factors (placebo effect) have been proposed to play a central role in human graft recipients with functional recovery in the absence of surviving grafts, animal models of neurodegenerative disease have consistently shown the same phenomenon. Our recent results point to the local inflammatory and immune response to transplantation as a key element which induces a trophic response in the CNS parenchyma and stimulates plastic changes of the recipient neural connections. Findings by other investigators, who studied the connections between the inflammatory and neurotrophic responses in vitro(1) and in vivo(2), and glial reaction to CNS trauma and trophic factor synthesis in vivo(3), support such conclusions. Accumulated evidence point to the need for further studies that would elucidate the role of the immune response in connection with CNS transplantation outcome.