Spinal cord injury (SCI) often results in irreversible loss of sensory and motor functions, and most SCIs are incurable with current medical practice. One of the hardest challenges in treating SCI is the development of a dysfunctional pathological microenvironment, which mainly comprises excessive inflammation, deposition of inhibitory molecules, neurotrophic factor deprivation, glial scar formation, and imbalance of vascular function. To overcome this challenge, implantation of functional biomaterials at the injury site has been regarded as a potential treatment for modulating the dysfunctional microenvironment to support axon regeneration, remyelination at injury site, and functional recovery after SCI. This review summarizes characteristics of dysfunctional pathological microenvironment and recent advances in biomaterials as well as the technologies used to modulate inflammatory microenvironment, regulate inhibitory microenvironment, and reshape revascularization microenvironment. Moreover, technological limitations, challenges, and future prospects of functional biomaterials to promote efficient repair of SCI are also discussed. This review will aid further understanding and development of functional biomaterials to regulate pathological SCI microenvironment.