Advances in cell therapy offer promise for some of the most devastating neural injuries, including spinal cord injury (SCI). Endogenous VSX2-expressing spinal V2a interneurons have been implicated as a key component in plasticity and therapeutically driven recovery post-SCI. While transplantation of generic V2a neurons may have therapeutic value, generation of human spinal V2a neurons with rostro-caudal specificity and assessment of their functional synaptic integration with the injured spinal cord has been elusive. Here, we efficiently differentiated optogenetically engineered cervical V2a spinal interneurons (SpINs) from human induced pluripotent stem cells and tested their capacity to form functional synapses with injured diaphragm motor networks in a clinically-relevant sub-acute model of cervical contusion injury. Neuroanatomical tracing and immunohistochemistry demonstrated transplant integration and synaptic connectivity with injured host tissue. Optogenetic activation of transplanted human V2a SpINs revealed functional synaptic connectivity to injured host circuits, culminating in improved diaphragm activity assessed by electromyography. Furthermore, optogenetic activation of host supraspinal pathways revealed functional innervation of transplanted cells by host neurons, which also led to enhanced diaphragm contraction indicative of a functional neuronal relay. Single cell analyses pre- and post-transplantation suggested the in vivo environment resulted in maturation of cervical SpINs that mediate the formation of neuronal relays, as well as differentiation of glial progenitors involved in repair of the damaged spinal cord. This study rigorously demonstrates feasibility of generating human cervical spinal V2a interneurons that develop functional host-transplant and transplant-host connectivity resulting in improved muscle activity post-SCI.