Progressive degeneration of the central nervous system leading to the loss of neuromotor, neurophysiological and cognitive abilities is the fundamental clinical problem in patients with many inherited metabolic diseases (IMD). Worldwide experience shows that morbidity, quality of life, and survival in these patients can be improved by allogeneic haematopoietic stem cell transplantation (HSCT), particularly when performed early in the course of the disease. At present, while available for some conditions, exogenous enzyme replacement therapy is unable to correct cognitive and central nervous system disease because of its inability to cross the blood-brain barrier. In contrast, HSCT allows donor-derived, enzyme-producing cells to migrate to the brain and other organs providing a permanent enzyme replacement therapy. HSCT may also mediate non-hematopoietic cell regeneration or repair. Traditionally, bone marrow has been the graft source for IMD patients. However, in the last 5 years many studies utilizing unrelated donor umbilical cord blood (UCB) as a graft source have demonstrated that UCB provides rapid and increased access to transplantation with favourable outcomes. This review describes preclinical studies and past and present clinical treatment approaches and discusses current controversies and future directions of this promising field.