This study examined the efficacy of transplanting olfactory ensheathing glia (OEG) in repairing spinal cord injury (SCI) using behavioral tests, retrograde labeling, as well as somatosensory and motor evoked potentials in rats. One week after surgery, motor function in OEG-treated rats was significantly superior to untreated controls (P < 0.05). Also, we found that up to 8 weeks following surgery to induce SCI, somatosensory and motor evoked potentials were found in the OEG-treated groups, but not in the transplantation and damage control groups. Retrograde labeling from the area distal to the SCI produced a higher number of labeled neurons in the ventrolateral division of red nucleus and motor cortex of OEG-treated rats compared to controls, which showed no retrograde labeling (P < 0.05). We believe that this study has important implications for characterizing the mechanisms of OEG transplantation as a treatment for SCI.