GOAL: To identify and overcome barriers to creating new neurotechnologies capable of restoring both motor and sensory function in individuals with neurological conditions. METHODS: This report builds upon the outcomes of a joint workshop between the US National Science Foundation and the German Research Foundation on New Perspectives in Neuroengineering and Neurotechnology convened in Arlington, VA, USA, November 13-14, 2014. RESULTS: The participants identified key technological challenges for recording and manipulating neural activity, decoding, and interpreting brain data in the presence of plasticity, and early considerations of ethical and social issues pertinent to the adoption of neurotechnologies. CONCLUSIONS: The envisaged progress in neuroengineering requires tightly integrated hardware and signal processing efforts, advances in understanding of physiological adaptations to closed-loop interactions with neural devices, and an open dialog with stakeholders and potential end-users of neurotechnology. SIGNIFICANCE: The development of new neurotechnologies (e.g., bidirectional brain-computer interfaces) could significantly improve the quality of life of people living with the effects of brain or spinal cord injury, or other neurodegenerative diseases. Focused efforts aimed at overcoming the remaining barriers at the electrode tissue interface, developing implantable hardware with on-board computation, and refining stimulation methods to precisely activate neural tissue will advance both our understanding of brain function and our ability to treat currently intractable disorders of the nervous system.