Globoid-cell leukodystrophy (GLD) is an inherited demyelinating disease caused by the deficiency of the lysosomal enzyme galactosylceramidase (GALC). A previous study in the murine model of GLD (twitcher) demonstrated a dramatic synergy between CNS-directed adeno-associated virus 2/5 (AAV2/5) gene therapy and myeloreductive bone marrow transplantation (BMT). However, the mechanism by which these two disparate therapeutic approaches synergize is not clear. In addition, the therapeutic efficacy may have been limited since the CNS-directed gene therapy was restricted to the forebrain and thalamus. In the current study, intrathecal and intracerebellar injections were added to the therapeutic regimen and the mechanism of synergy between BMT and gene therapy was determined. Although AAV2/5 alone provided supraphysiological levels of GALC activity and reduced psychosine levels in both the brain and spinal cord, it significantly increased CNS inflammation. Bone marrow transplantation alone provided essentially no GALC activity to the CNS and did not reduce psychosine levels. When AAV2/5 is combined with BMT, there are sustained improvements in motor function and the median life span is increased to 123 d (range, 92–282 d) compared with 41 d in the untreated twitcher mice. Interestingly, addition of BMT virtually eliminates both the disease and AAV2/5-associated inflammatory response. These data suggest that the efficacy of AAV2/5-mediated gene therapy is limited by the associated inflammatory response and BMT synergizes with AAV2/5 by modulating inflammation.