Transdifferentiation of transplanted marrow stromal cells (MSCs) and reactive changes of glial cells in a completely transected rat spinal cord were examined. Marrow stromal cells exhibited 2',3'-cyclic nucleotide 3'-phosphodiesterase (CNP) at the plasma membrane and this has allowed their identification after transplantation by immunoelectron microscopy. In the control rats, the lesion site showed activated microglia/neural macrophages and some elongated cells, whose cytoplasm was immunoreactive for CNP. Cells designated as CNP1 and apparently host-derived expressed CXCR4. In experimental rats receiving MSCs transplantation, CNP1 cells were increased noticeably. This was coupled with the occurrence of a different subset of CNP cells whose plasma membrane was CNP-immunoreactive and expressed CXCR4. These cells, designated as CNP2, enclosed both myelinated and unmyelinated neurites thus assuming a spatial configuration resembling that of Schwann cells. A remarkable feature was the extensive ramifications of CNP1 cells with long filopodia processes delineating the CNP2 cells and their associated neurites, forming many perineurial-like compartments. Present results have shown that CNP2 cells considered to be MSCs-derived can transform into cells resembling Schwann cells based on their spatial relation with the regenerating nerve fibers, whereas the CNP1 glial cells participate in formation of perineurial compartments, probably serving as conduits to guide the nerve fiber growth. The chemotactic migration of CNP cells either derived from host tissue or MSCs bearing CXCR4 may be attracted by stromal derived factor-1alpha (SDF-1alpha) produced locally. The coordinated cellular interaction between transplanted MSCs and local glial cells may promote the growth of nerve fibers through the lesion site.