Alzheimer's disease (AD) is characterized by neuronal loss in several regions of the brain. Recent studies have suggested that stem cell transplantation could serve as a potential therapeutic strategy to halt or ameliorate the inexorable disease progression. However, the optimal stage of the disease for stem cell transplantation to have a therapeutic effect has yet to be determined. Here, we demonstrated that transplantation of neural stem cells into 12-month-old Tg2576 brains markedly improved both cognitive impairments and neuropathological features by reducing β-amyloid processing and upregulating clearance of β-amyloid, secretion of anti-inflammatory cytokines, endogenous neurogenesis, as well as synapse formation. In contrast, the stem cell transplantation did not recover cognitive dysfunction and β-amyloid neuropathology in Tg2576 mice aged 15 months when the memory loss is manifest. Overall, this study underscores that stem cell therapy at optimal time frame is crucial to obtain maximal therapeutic effects that can restore functional deficits or stop the progression of AD.