Umbilical cord blood (UCB) is known to have stem/progenitor cells. We earlier showed that novel progenitors could be isolated from cryopreserved human UCB with high efficiency. The multipotent progenitor cells were induced to differentiate into neural-lineage cells under the appropriate condition. In this study, we confirmed these neurally induced progenitor cells (NPCs), containing higher quantities of nerve growth factor, promoted functional recovery in rats with spinal cord injury (SCI). Sprague-Dawley rats with SCI achieved a modest improvement in locomotor rating scale until 10 weeks after transplantation of the NPCs. SCI rats treated with NPCs also showed somatosensory-evoked potentials were recovered, and grafted cells especially exhibited oligodendrocytic phenotype around the necrotic cavity. These findings suggest that UCB-NPCs might be a therapeutic resource to repair damaged spinal cords.