Krabbe's disease (KD) is a demyelinating disorder caused by the deficiency of lysosomal galactocerebrosidase (GALC), affecting both the central (CNS) and the peripheral nervous system (PNS). A current therapy, hematopoietic stem cell transplantation (HSCT), is ineffective at correcting the PNS pathology. We have previously shown that systemic delivery of immortalized bone marrow-derived murine mesenchymal stromal cells (BM-MSCs) diminishes the neuropathology of transplanted Twitcher mice, a murine model of KD. In this study, to move one step closer to clinical application, the effectiveness of a systematic delivery of primary BM-MSCs to promote recovery of the Twitcher PNS was assessed. Primary BM-MSCs grafted to the Twitcher sciatic nerve led to increased GALC activity that was not correlated to decreased psychosine (the toxic GALC substrate) accumulation. Nevertheless, BM-MSC transplantation rescued the axonal phenotype of Twitcher mice in the sciatic nerve, with an increased density of both myelinated and unmyelinated axons in transplanted animals. Whereas no increase in myelination was observed, upon transplantation an increased proliferation of Schwann cell precursors occurred. Supporting these findings, in vitro, BM-MSCs promoted neurite outgrowth of Twitcher sensory neurons and proliferation of Twitcher Schwann cells. Moreover, BM-MSCs expressed nerve growth factor (NGF) and brain-derived neurotrophic factor (BDNF) and promoted increased BDNF synthesis by neighboring Schwann cells. Besides their action in neurons and glia, BM-MSCs led to macrophage activation in Twitcher sciatic nerves. In summary, primary BM-MSCs diminish the neuropathology of Twitcher sciatic nerves by coordinately affecting neurons, glia, and macrophages.