Stem cell-based therapy is a promising approach for treating a variety of disorders, including acute brain insults and neurodegenerative diseases. Stem cells such as mesenchymal stem cells (MSCs) secrete extracellular vesicles (EVs), circular membrane fragments (30 nm−1μm) that are shed from the cell surface, carrying several therapeutic molecules such as proteins and microRNAs. Because EV-based therapy is superior to cell therapy in terms of scalable production, biodistribution, and safety profiles, it can be used to treat brain diseases as an alternative to stem cell therapy. This review presents evidences evaluating the role of stem cell-derived EVs in stroke, traumatic brain injury, and degenerative brain diseases, such as Alzheimer’s disease and Parkinson’ disease. In addition, stem cell-derived EVs have better profiles in biocompatibility, immunogenicity, and safety than those of small chemical and macromolecules. The advantages and disadvantages of EVs compared with other strategies are discussed. Even though EVs obtained from native stem cells have potential in the treatment of brain diseases, the successful clinical application is limited by the short half-life, limited targeting, rapid clearance after application, and insufficient payload. We discuss the strategies to enhance the efficacy of EV therapeutics. Finally, EV therapies have yet to be approved by the regulatory authorities. Major issues are discussed together with relevant advances in the clinical application of EV therapeutics.