Background aims.  Olfactory stem cells (OSCs) are found in the olfactory mucosa and olfactory bulb and have the capacity to proliferate and differentiate along multiple tissue lineages. Rotenone; widely used insecticide has a neurodegenerative effect on the dopaminergic cells of substantia nigra (SN) of midbrain producing Parkinsonism. The aim of this study is to isolate rat OSCs from olfactory mucosa and olfactory bulb, culture these OSCs in suitable medium to allow for their proliferation to be used in the treatment of Parkinsonism induced by rotenone. Methods. The characteristics of OSCs, the effects of rotenone on the SN of midbrain and the curative effect of OSCs on the substantia nigra were determined morphologically, immunohistochemically, and by transmission electron microscopy. PKH 26; immunofluorescent dye .was used as a cell tracer to locate the transplanted cells in host midbrain. Results. OSCs were spindle shaped with irregular processes, and were positive for CD44 and Nestin and negative for CD34. Subcutaneous rotenone produced Parkinsonism through producing degeneration of the dopaminergic cells of SN of the midbrain. Transplantation of OSCs produced restoration of the normal structure of SN and dopaminergic cells and improves the clinical manifestations of Parkinsonism. Conclusion. These results indicate that, the isolated rat OSCs can proliferate and expand in vitro when culture in suitable medium and these cells can exert therapeutic effects in Parkinsonism by recruitment in SN and restoration of the structure and function of dopaminergic cells.