The spontaneous axon regeneration of damaged neurons is limited after spinal cord injury (SCI). Recently, mesenchymal stem cell (MSC) transplantation was proposed as a potential approach for enhancing nerve regeneration that avoids the ethical issues associated with embryonic stem cell transplantation. As SCI is a complex pathological entity, the treatment of SCI requires a multipronged approach. The purpose of the present study was to investigate the functional recovery and therapeutic potential of human MSCs (hMSCs) and polymer in a spinal cord hemisection injury model. Rats were subjected to hemisection injuries and then divided into three groups. Two groups of rats underwent partial thoracic hemisection injury followed by implantation of either polymer only or polymer with hMSCs. Another hemisection-only group was used as a control. Behavioral, electrophysiological and immunohistochemical studies were performed on all rats. The functional recovery was significantly improved in the polymer with hMSC-transplanted group as compared with control at five weeks after transplantation. The results of electrophysiologic study demonstrated that the latency of somatosensory- evoked potentials (SSEPs) in the polymer with hMSC-transplanted group was significantly shorter than in the hemisection-only control group. In the results of immunohistochemical study, Ղ-gal-positive cells were observed in the injured and adjacent sites after hMSC transplantation. Surviving hMSCs differentiated into various cell types such as neurons, astrocytes and oligodendrocytes. These data suggest that hMSC transplantation with polymer may play an important role in functional recovery and axonal regeneration after SCI, and may be a potential therapeutic strategy for SCI.