Traumatic spinal cord injury results in persistent disability due to disconnection of surviving neural elements. Neural stem cell transplantation has been proposed as a therapeutic option, but optimal cell type and mechanistic aspects remain poorly defined. Here, we describe robust engraftment into lesioned immunodeficient mice of human neuroepithelial stem cells derived from the developing spinal cord and maintained in self-renewing adherent conditions for long periods. Extensive elongation of both graft and host axons occurs. Improved functional recovery after transplantation depends on neural relay function through the grafted neurons, requires the matching of neural identity to the anatomical site of injury, and is accompanied by expression of specific marker proteins. Thus, human neuroepithelial stem cells may provide an anatomically specific relay function for spinal cord injury recovery.