The research reveals discoveries in the hippocampus - a part of the brain commonly associated with memory function - where the brain's ability to regenerate nerve cells or neurons is known to degenerate with age.
The study by Dr Natalie Bull and Professor Perry Bartlett, from The University of Queensland-based institute, features on the front cover of the prestigious Washington-based Journal of Neuroscience.
Dr Bull's and Professor Bartlett's research demonstrated adult mice produce multi-purpose, or progenitor, cells in the hippocampus.
"The research suggests while progenitor cells in mice do not behave like stem cells, which have the ability to self-renew, the progenitor cells are nevertheless capable of generating nerve cells in the hippocampus," Professor Bartlett said.
Professor Bartlett, who is also QBI director, said the latest discovery in the hippocampus was further evidence the human nervous system had the potential capacity to respond to its outside environment by generating new nerve cells.
Established in 2003, UQ's Queensland Brain Institute is one of the world's leading research institute's studying the fundamental mechanisms that regulate brain function.
In 1999, a team led by Professor Bartlett was the first to identify stem cells in the brain and then the first to isolate those cells in 2001.
In September 2004, QBI discovered a molecule that blocks regrowth of damaged nerve cell processes - research considered important in developing potential therapies for people with head and spinal injuries.
Researchers at the QBI are also working on treatments for Alzheimer's, stroke, Parkinson's and depression.
Professor Bartlett is an Australian Research Council Federation Fellow, UQ's Foundation Chair in Molecular Neuroscience and was recently elected a Fellow of The Australian Academy of Science.