Once their safety is confirmed, human-induced pluripotent stem cells (hiPSCs), which do not entail ethical concerns, may become a preferred cell source for regenerative medicine. Here, we investigated the therapeutic potential of transplanting hiPSC-derived neurospheres (hiPSC-NSs) into nonobese diabetic (NOD)-severe combined immunodeficient (SCID) mice to treat spinal cord injury (SCI). For this, we used a hiPSC clone (201B7), established by transducing four reprogramming factors (Oct3/4, Sox2, Klf4, and c-Myc) into adult human fibroblasts. Grafted hiPSC-NSs survived, migrated, and differentiated into the three major neural lineages (neurons, astrocytes, and oligodendrocytes) within the injured spinal cord. They showed both cell-autonomous and noncell-autonomous (trophic) effects, including synapse formation between hiPSC-NS–derived neurons and host mouse neurons, expression of neurotrophic factors, angiogenesis, axonal regrowth, and increased amounts of myelin in the injured area. These positive effects resulted in significantly better functional recovery compared with vehicle-treated control animals, and the recovery persisted through the end of the observation period, 112 d post-SCI. No tumor formation was observed in the hiPSC-NS–grafted mice. These findings suggest that hiPSCs give rise to neural stem/progenitor cells that support improved function post-SCI and are a promising cell source for its treatment.