Functional recovery is still limited mainly due to several mechanisms, such as the activation of Nogo receptor-1 (NgR1) signaling, when human induced pluripotent stem cell-derived neural stem/progenitor cells (hiPSC-NS/PC) are transplanted for subacute spinal cord injury (SCI). We previously reported the neuroprotective and regenerative benefits of overexpression of lateral olfactory tract usher substance (LOTUS), an endogenous NgR1 antagonist, in the injured spinal cord using transgenic mice. Here, we evaluate the effects of lentiviral transduction of LOTUS gene into hiPSC-NS/PCs before transplantation in a mouse model of subacute SCI. The transduced LOTUS contributes to neurite extension, suppression of apoptosis, and secretion of neurotrophic factors in vitro. In vivo, the hiPSC-NS/PCs enhance the survival of grafted cells and enhance axonal extension of the transplanted cells, resulting in significant restoration of motor function following SCI. Therefore, the gene transduction of LOTUS in hiPSC-NS/PCs could be a promising adjunct for transplantation therapy for SCI.