Marrow stromal cells (MSC) can be expanded rapidly in vitro and differentiated into multiple mesodermal cell types. In addition, differentiation into neuron-like cells expressing markers typical for mature neurons has been reported. To analyze whether such cells, exposed to differentiation media, could develop electrophysiological properties characteristic of neurons, we performed whole-cell recordings. Neuron-like MSC, however, lacked voltage-gated ion channels necessary for generation of action potentials. We then delivered MSC into the injured spinal cord to study the fate of transplanted MSC and possible effects on functional outcome in animals rendered paraplegic. MSC given 1 week after injury led to significantly larger numbers of surviving cells than immediate treatment and significant improvements of gait. Histology 5 weeks after spinal cord injury revealed that MSC were tightly associated with longitudinally arranged immature astrocytes and formed bundles bridging the epicenter of the injury. Robust bundles of neurofilament-positive fibers and some 5-hydroxytryptamine-positive fibers were found mainly at the interface between graft and scar tissue. MSC constitute an easily accessible, easily expandable source of cells that may prove useful in the establishment of spinal cord repair protocols.