Numerous efforts have been made to maximize the efficacy of treatment for spinal cord injury (SCI). Recently, oligodendrocyte-type 2 astrocyte (O-2A) progenitor cells have been reported to remyelinate focal areas of demyelinated spinal cord in adult rats. We conducted a study to investigate the therapeutic potential of transplantion of O-2A cells in a rat model of acute SCI. SCI was induced with an NYU Impactor at T9 of rats. O-2A cells labeled with bromodeoxyuridine (BrdU) were transplanted into sites of SCI at 1 week after the induction of SCI. At 6 weeks after cell transplantation, a behavioral test showed significant functional improvement in animals that had received O-2A–cell transplants as compared to animals given cell-culture medium alone. An electrophysiological study revealed that the transplants did not improve the amplitude or latency of somatosensory evoked potentials, but a recording of motor evoked potentials showed that the latency of these potentials in the O-2A–cell-transplant group was significantly shorter than that in the group treated with cell-culture medium. Following transplantation of BrdU-labeled O-2A cells, cells positive for BrdU were detected at and near sites of SCI. Cells labeled for both BrdU and 2′,3′ -cyclic nucleotide-3-phosphodiesterase were also detected, showing that the transplanted O-2A cells differentiated into oligodendrocytes. By contrast, cells labeled for BrdU and glial fibrillary acidic protein, or for neuronal nuclei antigen, were not detected. Furthermore, a tract-tracing study showed that numbers of retrogradely labeled neurons increased in areas of the brain stem after O-2A–cell transplantation. The study data showed that after being transplanted into an animal with SCI, O-2A cells migrated to the area adjacent to the site of injury and differentiated into oligodendrocytes. The behavioral test and the electrophysiological and morphological studies showed that transplantation of O-2A cells may play an important role in functional recovery and the regeneration of axons after SCI.