The body’s capacity to restore damaged neural networks in the injured CNS is severely limited. Although various treatment regimens can partially alleviate spinal cord injury (SCI), the mechanisms responsible for symptomatic improvement remain elusive. Here, using a mouse model of SCI, we have shown that transplantation of neural stem cells (NSCs) together with administration of valproic acid (VPA), a known antiepileptic and histone deacetylase inhibitor, dramatically enhanced the restoration of hind limb function. VPA treatment promoted the differentiation of transplanted NSCs into neurons rather than glial cells. Transsynaptic anterograde corticospinal tract tracing revealed that transplant-derived neurons reconstructed broken neuronal circuits, and electron microscopic analysis revealed that the transplant-derived neurons both received and sent synaptic connections to endogenous neurons. Ablation of the transplanted cells abolished the recovery of hind limb motor function, confirming that NSC transplantation directly contributed to restored motor function. These findings raise the possibility that epigenetic status in transplanted NSCs can be manipulated to provide effective treatment for SCI.