The family of interleukin (IL)-6 like cytokines plays an important role in the neuroinflammatory response to injury by regulating both neural as well as immune responses. Here, we show that expression of the IL-6 family member oncostatin M (OSM) and its receptor is upregulated after spinal cord injury (SCI). To reveal the relevance of increased OSM signaling in the pathophysiology of SCI, OSM was applied locally after spinal cord hemisection in mice. OSM treatment significantly improved locomotor recovery after mild and severe SCI. Improved recovery in OSM-treated mice was associated with a reduced lesion size. OSM significantly diminished astrogliosis and immune cell infiltration. Thus, OSM limits secondary damage after CNS trauma. In vitro viability assays demonstrated that OSM protects primary neurons in culture from cell death, suggesting that the underlying mechanism involves direct neuroprotective effects of OSM. Furthermore, OSM dose-dependently promoted neurite outgrowth in cultured neurons, indicating that the cytokine plays an additional role in CNS repair. Indeed, our in vivo experiments demonstrate that OSM treatment increases plasticity of serotonergic fibers after SCI. Together, our data show that OSM is produced at the lesion site, where it protects the CNS from further damage and promotes recovery.