Oligodendrocytes are sensitive to ischemic damage. The Sonic hedgehog (Shh) pathway is critical in oligodendrogenesis; Gli1 is the principal effector of Shh signaling. We investigated oligodendrogenesis and Shh/Gli1 pathway activation after bone marrow stromal cell (BMSC) treatment of stroke in rats. Rats were subjected to the middle cerebral artery occlusion (MCAo). BMSCs have been shown to promote functional recovery post stroke. A therapeutic dose of BMSC (3 x 10(6) cells) treatment was initiated 1 day after MCAo. Immunohistochemistry was carried out to measure the oligodendrocyte progenitor cells, oligodendrocytes, myelin, and expressions of Shh and Gli1 at 14 days after MCAo. Gene expression of Shh and Gli1 was tested at 2 days after MCAo. An in vitro study was used to investigate the effects of BMSC on a premature oligodendrocyte cell line (N20.1 cells). BMSC treatment significantly increased O4(+) oligodendrocytes, MBP(+) area, and bromodeoxyuridine (BrdU)(+), NG2(+), BrdU(+)-NG2(+) cells, and mRNA and protein expressions of Shh and Gli1 in the ipsilateral brain of the MCAo rats than that in phosphate buffered saline (PBS)-treated rats. BMSCs promoted N20.1 cell proliferation and Gli1 mRNA expression, and these effects were abolished by the Shh pathway inhibitor cyclopamine. These data indicate that the BMSC treatment stimulates oligodendrogenesis by activation of the Shh/Gli1 pathway post stroke.