This study investigated the ability of mesenchymal stem cells (MSCs) derived from full-term human umbilical cord blood to survive, integrate and differentiate after intravitreal grafting to the degenerating neonatal rat retina following intracranial optic tract lesion. MSCs survived for 1 week in the absence of immunosuppression. When host animals were treated with cyclosporin A and dexamethasone to suppress inflammatory and immune responses, donor cells survived for at least 3 weeks, and were able to spread and cover the entire vitreal surface of the host retina. However, MSCs did not significantly integrate into or migrate through the retina. They also maintained their human antigenicity, and no indication of neural differentiation was observed in retinas where retinal ganglion cells either underwent severe degeneration or were lost. These results have provided the first in vivo evidence that MSCs derived from human umbilical cord blood can survive for a significant period of time when the host rat response is suppressed even for a short period. These results, together with the observation of a lack of neuronal differentiation and integration of MSCs after intravitreal grafting, has raised an important question as to the potential use of MSCs for neural repair through the replacement of lost neurons in the mammalian retina and central nervous system.