Based on their differentiation ability, bone marrow stromal cells (MSCs) are a good source for cell therapy. Using a cynomolgus monkey peripheral nervous system injury model, we examined the safety and efficacy of Schwann cells induced from MSCs as a source for auto-cell transplantation therapy in nerve injury. Serial treatment of monkey MSCs with reducing agents and cytokines induced their differentiation into cells with Schwann cell properties at a very high ratio. Expression of Schwann cell markers was confirmed by both immunocytochemistry and reverse transcription-polymerase chain reaction. Induced Schwann cells were used for auto-cell transplantation into the median nerve and followed-up for 1year. No abnormalities were observed in general conditions. Ki67-immunostaining revealed no sign of massive proliferation inside the grafted tube. Furthermore, ¹⁸F-fluorodeoxygluocose-positron emission tomography scanning demonstrated no abnormal accumulation of radioactivity except in regions with expected physiologic accumulation. Restoration of the transplanted nerve was corroborated by behavior analysis, electrophysiology and histological evaluation. Our results suggest that auto-cell transplantation therapy using MSC-derived Schwann cells is safe and effective for accelerating the regeneration of transected axons and for functional recovery of injured nerves. The practical advantages of MSCs are expected to make this system applicable for spinal cord injury and other neurotrauma or myelin disorders where the acceleration of regeneration is expected to enhance functional recovery.