Stem cell transplantation therapy has emerged as a promising regenerative medicine for ischemic stroke and other neurodegenerative disorders. However, many issues and problems remain to be resolved before successful clinical applications of cell-based therapy. To this end, some recent investigations have sought to benefit from well-known mechanisms of ischemic/hypoxic preconditioning. Ischemic/hypoxic preconditioning activates endogenous defense mechanisms that show marked protective effects against multiple insults found in ischemic stroke and other acute attacks. As in many other cell types, a sublethal hypoxic exposure significantly increases the tolerance and regenerative properties of stem cells and progenitor cells. So far, a variety of preconditioning triggers have been tested on different stem cells and progenitor cells. Preconditioned stem cells and progenitors generally show much better cell survival, increased neuronal differentiation, enhanced paracrine effects leading to increased trophic support, and improved homing to the lesion site. Transplantation of preconditioned cells helps to suppress inflammatory factors and immune responses, and promote functional recovery. Although the preconditioning strategy in stem cell therapy is still an emerging research area, accumulating information from reports over the last few years already indicates it as an attractive, if not essential, prerequisite for transplanted cells. It is expected that stem cell preconditioning and its clinical applications will attract more attention in both the basic research field of preconditioning as well as in the field of stem cell translational research. This review summarizes the most important findings in this active research area, covering the preconditioning triggers, potential mechanisms, mediators, and functional benefits for stem cell transplant therapy.