Neural stem cell (NSC) transplantation is a promising strategy for replacing lost neurons following spinal cord injury. However, the survival and differentiation of transplanted NSCs is limited, possibly owing to the neurotoxic inflammatory microenvironment. Because of the important role of glucose metabolism in M1/M2 polarization of microglia/macrophages, we hypothesized that altering the phenotype of microglia/macrophages by regulating the activity of aldose reductase (AR), a key enzyme in the polyol pathway of glucose metabolism, would provide a more beneficial microenvironment for NSC survival and differentiation. Here, we reveal that inhibition of host AR promoted the polarization of microglia/macrophages toward the M2 phenotype in lesioned spinal cord injuries. M2 macrophages promoted the differentiation of NSCs into neurons in vitro. Transplantation of NSCs into injured spinal cords either deficient in AR or treated with the AR inhibitor sorbinil promoted the survival and neuronal differentiation of NSCs at the injured spinal cord site and contributed to locomotor functional recovery. Our findings suggest that inhibition of host AR activity is beneficial in enhancing the survival and neuronal differentiation of transplanted NSCs and shows potential as a treatment of spinal cord injury.