The goal of stem cell therapy for spinal cord injury (SCI) is to restore motor function without exacerbating pain. Induced pluripotent stem cells (iPSC) may be administered by autologous transplantation, avoiding immunologic challenges. Identifying strategies to optimize iPSC-derived neural progenitor cells (hiNPC) for cell transplantation is an important objective. Herein, we report a method that takes advantage of the growth factor-like and anti-inflammatory activities of the fibrinolysis protease, tissue plasminogen activator tPA, without effects on hemostasis. We demonstrate that conditioning hiNPC with enzymatically-inactive tissue-type plasminogen activator (EI-tPA), prior to grafting into a T3 lesion site in a clinically relevant severe SCI model, significantly improves motor outcomes. EI-tPA-primed hiNPC grafted into lesion sites survived, differentiated, acquired markers of motor neuron maturation, and extended βIII-tubulin-positive axons several spinal segments below the lesion. Importantly, only SCI rats that received EI-tPA primed hiNPC demonstrated significantly improved motor function, without exacerbating pain. When hiNPC were treated with EI-tPA in culture, NMDA-R-dependent cell signaling was initiated, expression of genes associated with stemness (Nestin, Sox2) was regulated, and thrombin-induced cell death was prevented. EI-tPA emerges as a novel agent capable of improving the efficacy of stem cell therapy in SCI.