The Edinburgh University team discovered the bacteria, which cause leprosy, convert cells in the nerve system so they become like stem cells.
These cells are known as the building blocks of life and are seen as the key to finding cures for a range of conditions from motor neurone disease to spinal cord injuries, which are currently irreversible.
It is hoped scientists will be able to use leprosy bacteria to grow stem cells, which have the ability to turn into any other type of cell needed by the body. These could then be transplanted into patients to repair damage.
Dr Rob Buckle, head of regenerative medicine at the Medical Research Council, has described the research as "groundbreaking".
He said: "This discovery is important not just for our understanding and treatment of bacterial disease but for the rapidly progressing field of regenerative medicine.
"In future, this knowledge may help scientists to improve the safety and utility of lab-produced pluripotent stem cells and help drive the development of new regenerative therapies for a range of human diseases, which are currently impossible to treat."
Longer-term he is hopeful the insight will lead to a new way of creating stem cell therapies. The cells can be harvested from embryos but this raises ethical issues and Mr Rambukkana said there was also a danger of embryonic stem cells developing into tumours. The leprosy cells do not carry this risk.
Mr Rambukkana said: "This (research) is very intriguing as it is the first time we have seen that functional adult tissue cells can be reprogrammed into stem cells by natural bacterial infection, which also does not carry the risk of creating tumorous cells.
"Potentially you could use the bacteria to change the flexibility of cells, turning them into stem cells and then use the standard antibiotics to kill the bacteria completely so the cells could then be transplanted safely to tissue that has been damaged by degenerative disease."
He said it would take many years to reach this stage, but added: "First of all you need to have the funding. If you have the funding you can do miraculous things."
Edinburgh University recently announced their scientists had developed a new way of growing embryonic stem cells which uses a "tiny scaffold" for the cells to cling to as they grow.