The specific loss of midbrain dopamine neurons (mDANs) causes major motor dysfunction in Parkinson's disease, which makes cell replacement a promising therapeutic approach. However, poor survival of grafted mDANs remains an obstacle to successful clinical outcomes. Here we show that the surgical procedure itself (referred to here as 'needle trauma') triggers a profound host response that is characterized by acute neuroinflammation, robust infiltration of peripheral immune cells and brain cell death. When midbrain dopamine (mDA) cells derived from human induced pluripotent stem (iPS) cells were transplanted into the rodent striatum, less than 10% of implanted tyrosine hydroxylase (TH) mDANs survived at two weeks after transplantation. By contrast, TH grafted cells mostly survived. Notably, transplantation of autologous regulatory T (T) cells greatly modified the response to needle trauma, suppressing acute neuroinflammation and immune cell infiltration. Furthermore, intra-striatal co-transplantation of T cells and human-iPS-cell-derived mDA cells significantly protected grafted mDANs from needle-trauma-associated death and improved therapeutic outcomes in rodent models of Parkinson's disease with 6-hydroxydopamine lesions. Co-transplantation with T cells also suppressed the undesirable proliferation of TH grafted cells, resulting in more compact grafts with a higher proportion and higher absolute numbers of TH neurons. Together, these data emphasize the importance of the initial inflammatory response to surgical injury in the differential survival of cellular components of the graft, and suggest that co-transplanting autologous T cells effectively reduces the needle-trauma-induced death of mDANs, providing a potential strategy to achieve better clinical outcomes for cell therapy in Parkinson's disease.