Cell transplantation is a promising way to treat spinal cord injury and neurodegenerative disorders. Neural stem cells taken from the embryonic spinal cord are an appealing source of cells for transplantation because these cells are committed to making spinal cord progeny. However these stem cells are rare and require expansion in tissue culture to generate sufficient cells for transplantation. We have developed a novel method for expanding embryonic mouse spinal cord stem cells using a co-culture system with endothelial cells. This method improves neural stem cell survival and preserves their multipotency, including their ability to make motor neurons. Transplantation of endothelial-expanded neural stem cells that were treated with sonic hedgehog (Shh) and retinoic acid (RA) during the expansion phase, into an adult mouse SCI model resulted in significant recovery of sensory and motor function.