Galectin-1 (gal-1), a special lectin with high affinity to β-galactosides, is implicated in protection against ischemic brain injury. The present study investigated transplantation of gal-1-secreting neural stem cell (s-NSC) into ischemic brains and identified the mechanisms underlying protection. To accomplish this goal, secretory gal-1 was stably overexpressed in NE-4C neural stem cells. Transient cerebral ischemia was induced in mice by middle cerebral artery occlusion for 60 minutes and s-NSCs were injected into the striatum and cortex within 2 hours post-ischemia. Brain infarct volume and neurological performance were assessed up to 28 days post-ischemia. s-NSC transplantation reduced infarct volume, improved sensorimotor and cognitive functions, and provided more robust neuroprotection than non-engineered NSCs or gal-1-overexpressing (but non-secreting) NSCs. White matter injury was also ameliorated in s-NSC-treated stroke mice. Gal-1 modulated microglial function in vitro, by attenuating secretion of pro-inflammatory cytokines (TNF-α and nitric oxide) in response to LPS stimulation and enhancing production of anti-inflammatory cytokines (IL-10 and TGF-β). Gal-1 also shifted microglia/macrophage polarization toward the beneficial M2 phenotype in vivo by reducing CD16 expression and increasing CD206 expression. In sum, s-NSC transplantation confers robust neuroprotection against cerebral ischemia, probably by alleviating white matter injury and modulating microglial/macrophage function.