Introduction: Peripheral nervous system has an innate regenerative ability that many factors are involved in its formation, such as Schwann cells, growth factors, and extracellular matrix. However, in severe injuries, peripheral nerve regeneration process is very weak and ineffective and therapeutic measures are needed for nerve regeneration. Current therapeutic methods have several limitations and low efficacy. In this regard, one of the most important research approaches is using stem cells in the regeneration of peripheral nerves. Stem cells have a potential to differentiate into Schwann cells. Stem cells modulate the immune system by secreting neurotrophic factors and help formation of myelin layer during peripheral nerve regeneration. Researches in this field also represent these capabilities and promise a bright future in the application of stem cells in the regeneration of peripheral nerve injuries. Conclusion: Regarding the importance of stem cells in the future of regenerative medicine and neurological tissue engineering, understanding of characteristics of stem cells as well as recognition of the extraction resource and their abilities in promoting the peripheral nerve regeneration are necessary. This paper is a review of the most important progress that has been achieved in this field.