Spinal cord injury (SCI) results in loss of oligodendrocytes demyelination of surviving axons and severe functional impairment. Spontaneous remyelination is limited. Thus, cell replacement therapy is an attractive approach for myelin repair. In this study, we transplanted adult brain-derived neural precursor cells (NPCs) isolated from yellow fluorescent protein-expressing transgenic mice into the injured spinal cord of adult rats at 2 and 8 weeks after injury, which represents the subacute and chronic phases of SCI. A combination of growth factors, the anti-inflammatory drug minocycline, and cyclosporine A immunosuppression was used to enhance the survival of transplanted adult NPCs. Our results show the presence of a substantial number of surviving NPCs in the injured spinal cord up to 10 weeks after transplantation at the subacute stage of SCI. In contrast, cell survival was poor after transplantation into chronic lesions. After subacute transplantation, grafted cells migrated >5 mm rostrally and caudally. The surviving NPCs integrated principally along white-matter tracts and displayed close contact with the host axons and glial cells. Approximately 50% of grafted cells formed either oligodendroglial precursor cells or mature oligodendrocytes. NPC-derived oligodendrocytes expressed myelin basic protein and ensheathed the axons. We also observed that injured rats receiving NPC transplants had improved functional recovery as assessed by the Basso, Beattie, and Bresnahan Locomotor Rating Scale and grid-walk and footprint analyses. Our data provide strong evidence in support of the feasibility of adult NPCs for cell-based remyelination after SCI.