Vision loss caused by the death of photoreceptors is the leading cause of irreversible blindness in the developed world. Rapid advances in stem cell biology and techniques in cell transplantation have made photoreceptor replacement by transplantation a very plausible therapeutic strategy. These advances include the demonstration of restoration of vision following photoreceptor transplantation and the generation of transplantable populations of donor cells from stem cells. In this review, we present a brief overview of the recent progress in photoreceptor transplantation. We then consider in more detail some of the challenges presented by the degenerating retinal environment that must play host to these transplanted cells, how these may influence transplanted photoreceptor cell integration and survival, and some of the progress in developing strategies to circumnavigate these issues.