As a physical barrier to regenerating axons, reactive astrogliosis is also a biochemical barrier which can secrete inhibitory molecules, including chondroitin sulfate proteoglycans (CSPGs) in the pathological mechanism of spinal cord injury (SCI). Thus, inhibition of astroglial proliferation and CSPG production might facilitate axonal regeneration after SCI. Recent studies have demonstrated that epidermal growth factor receptor (EGFR) activation triggers quiescent astrocytes into becoming reactive astrocytes and forming glial scar after CNS injury. In the present study, we investigated whether a specific EGFR inhibitor (AG1478) could attenuate the reactive astrogliosis and production of CSPGs, alleviate demyelination, and eventually enhance the functional recovery after SCI in rats. Our results showed that pEGFR immunoreactivity was up-regulated significantly post injury, mainly confined to astrocytes. Meanwhile, astrocytes near the injury site after SCI became activated obviously characterized by hypertrophic morphology and enhanced GFAP expression. However, administration of AG1478 remarkably reduced trauma induced-reactive astrogliosis and accumulation of CSPGs. Furthermore, the treatment with AG1478 also alleviated demyelination, increased expression of growth-associated proteins-43 (GAP-43) and improved hindlimb function after SCI. Therefore, the local blockade of EGFR in an injured area is beneficial to functional outcome by facilitating a more favorable environment for axonal regeneration in SCI rats.