New neurons are continuously generated in the dentate gyrus of the mammalian hippocampus and in the subventricular zone of the lateral ventricles throughout life. The origin of these new neurons is believed to be from multipotent adult neural stem cells. Aided by new methodologies, significant progress has been made in the characterization of neural stem cells and their development in the adult brain. Recent studies have also begun to reveal essential extrinsic and intrinsic molecular mechanisms that govern sequential steps of adult neurogenesis in the hippocampus and subventricular zone/olfactory bulb, from proliferation and fate specification of neural progenitors to maturation, navigation, and synaptic integration of the neuronal progeny. Future identification of molecular mechanisms and physiological functions of adult neurogenesis will provide further insight into the plasticity and regenerative capacity of the mature central nervous system.