Because of their strong proliferative capacity and multi-potency, placenta-derived mesenchymal stem cells have gained interest as a cell source in the ifeld of nerve damage repair. In the present study, human placenta-derived mesenchymal stem cells were induced to differentiate into neural stem cells, which were then transplanted into the spinal cord after local spinal cord injury in rats. The motor functional recovery and pathological changes in the injured spinal cord were observed for 3 successive weeks. The results showed that human placenta-derived mesenchymal stem cells can differentiate into neuron-like cells and that induced neural stem cells contribute to the resto-ration of injured spinal cord without causing transplant rejection. Thus, these cells promote the recovery of motor and sensory functions in a rat model of spinal cord injury. Therefore, human placenta-derived mesenchymal stem cells may be useful as seed cells during the repair of spinal cord injury.