OBJECT The results of olfactory ensheathing cell (OEC) transplantation have raised great expectations as a potential treatment for spinal cord injury (SCI). Its capacity to promote functional neural repair, however, remains unclear. The authors studied axonal growth and locomotor recovery after C-7 contusion injury and OEC transplantation in adult rats. METHODS Twenty-four male Wistar rats underwent a mild C-7 contusion injury that completely disrupted the dorsal corticospinal tract (DCST). In 14 rats OECs were transplanted into the lesion, and 10 were used as controls. At 3 months postcontusion, the kinematics of locomotion were assessed, and the CST was traced by injecting dextran tetramethylrhodamine bilaterally into the cerebral cortex. The animals were killed 2 weeks after tracer injection, and their spinal cords were studied immunohistochemically. Although the survival of transplanted cells varied, they were present in all cases. The authors observed neither OEC migration nor DCST axon regeneration in any of the cell transplant-treated rats. Corticospinal axons ended in retraction bulbs at the proximal edge of the lesion or, exceptionally, a few micrometers inside the transplant. The results of neurofilament immunohistochemical analysis provided evidence of neurites from systems other than the DCST growing into the transplant, but in some cases these neurites formed loops of pathological appearance. Contusion injury of C-7 caused chronic locomotor deficits that did not improve after OEC transplants. CONCLUSIONS The findings in this study indicate that OEC transplants alone are not sufficient for neural repair and functional recovery after SCI. In addition, OECs can induce abnormal axonal growth, making further studies necessary before considering their clinical use.