The mouse hair follicle is an easily accessible source of actively growing, pluripotent adult stem cells. C57BL transgenic mice, labeled with the fluorescent protein GFP, afforded follicle stem cells whose fate could be followed when transferred to recipient animals. These cells appear to be relatively undifferentiated since they are positive for the stem cell markers nestin and CD34 but negative for the keratinocyte marker keratin 15. These hair follicle stem cells can differentiate into neurons, glia, keratinocytes, smooth muscle cells and melanocytes in vitro. Implanting hair follicle stem cells into the gap region of severed sciatic or tibial nerves greatly enhanced the rate of nerve regeneration and restoration of nerve function. The transplanted follicle cells transdifferentiated mostly into Schwann cells, which are known to support neuron regrowth. The treated mice regained the ability to walk essentially normally. In the present study, we severed the thoracic spinal chord of C57BL/6 immunocompetent mice and transplanted GFP-expressing hair follicle stem cells to the injury site. Most of the transplanted cells also differentiated into Schwann cells that apparently facilitated repair of the severed spinal cord. The rejoined spinal cord reestablished extensive hind-limb locomotor performance. These results suggest that hair follicle stem cells can promote the recovery of spinal cord injury. Thus, hair follicle stem cells provide an effective accessible, autologous source of stem cells for the promising treatment of peripheral nerve and spinal cord injury.