Our long term objectives are to develop effective transplantation strategies for treatment of spinal cord injury using well-defined neural stem cells. Despite the potential to replace cells and repair damaged CNS, the therapeutic value of this approach remains unproven. We have shown that lineage-restricted precursors (NPC) composed of neuronal and glial restricted precursors (NRP and GRP, respectively) can be isolated from transgenic AP rats and used for reliable fate analysis. When grafted into the adult CNS, they survive and differentiate into distinct neural phenotypes. Together the NRP/GRP create a micro-environment that allows robust neuronal differentiation in the injured spinal cord and support recovery of function. The neurons produced by the NPC graft integrate with host tissue, form synapses and project long axons that could potentially circumvent the poor regenerative capacity of the injured host. We propose to test specific hypotheses that grafts of lineage restricted precursors can repopulate the site of spinal cord injury, integrate with the host, promote sprouting, myelination and host protection, and reconstruct interrupted connections by forming functional relays with targets. Because the properties of the NPC are likely to be affected by the host microenvironment, we will test the role of specific therapeutic mechanisms in selected injury systems. In Aim 1 we will follow our studies that showed recovery in a contusion injury by examining how the NPC graft can modify the injury environment and whether recovery is mediated through sparing and sprouting. In Aim 2 we will test the ability of graft-derived neurons to establish active connections with the host and form a functional relay between the severed dorsal column axons and their target resulting in recovery of sensory deficits. Aim 3 will examine whether NPCs can promote axon growth in a lateral funiculus injury by connecting the axotomized rubrospinal tract and local circuits. The therapeutic efficacy and mechanisms of the NPC graft will be examined by a series of behavioral and physiological tests as well as analysis of the NPC expression profile and graft ablation. To maximize the therapeutic effects, the NPC grafts will be combined with treatments that improve axon growth and tested for delivery by a minimally invasive technique. Taken together, these experiments will test the specific elements of our hypothesis with respect to the role of lineage restricted precursors to participate and contribute to multiple stages of the recovery process.