Adipose-derived stromal cells (ASCs) are an alternative source of stem cells for cell-based therapies of neurological disorders such as spinal cord injury (SCI). In the present study, we predifferentiated ASCs (pASCs) and compared their behavior with naïve ASCs in vitro and after transplantation into rats with a balloon-induced compression lesion. ASCs were predifferentiated into spheres before transplantation, then pASCs or ASCs were injected intraspinally 1 week after SCI. The cells’ fate and the rats’ functional outcome were assessed using behavioral, histological, and electrophysiological methods. Immunohistological analysis of pASCs in vitro revealed the expression of NCAM, NG2, S100, and p75. Quantitative RT-PCR at different intervals after neural induction showed the up-regulated expression of the glial markers NG2 and p75 and the neural precursor markers NCAM and Nestin. Patch clamp analysis of pASCs revealed three different types of membrane currents; however, none were fast activating Na⁺ currents indicating a mature neuronal phenotype. Significant improvement in both the pASC and ASC transplanted groups was observed in the BBB motor test. In vivo, pASCs survived better than ASCs did and interacted closely with the host tissue, wrapping host axons and oligodendrocytes. Some transplanted cells were NG2- or CD31-positive, but no neuronal markers were detected. The predifferentiation of ASCs plays a beneficial role in SCI repair by promoting the protection of denuded axons; however, functional improvements were comparable in both the groups, indicating that repair was induced mainly through paracrine mechanisms.