Rubrospinal tract cells undergo massive retrograde degeneration following spinal cord damage in newborn rats (Prendergast and Stelzner, J. Comp. Neurol. 166:163-172, '76b). In the current study, fetal spinal cord tissue (E12-14) was grafted into midthoracic spinal cord lesions in newborn rats (less than 72 hours old) in order to determine whether such transplants could modify the response of the immature host central nervous system (CNS) to axotomy. These transplants grew, differentiated, and formed extensive areas of apposition with the recipient spinal cords. Counts of red nucleus (RN) neurons indicated a significant loss of RN neurons in animals with lesion alone, but a rescuing of most of these cells if a transplant was placed into the lesion site. In fact, the number of neurons in animals with lesions and transplants was not significantly different from control animals. Horseradish peroxidase injected 10-15 mm caudal to the transplant (at 1-12 months post-transplantation) labeled neurons within the transplant and RN neurons contralateral to the spinal cord lesions and transplant. In animals with spinal cord lesion but no transplant, only the unaxotomized RN was labeled. Thus, spinal cord transplants prevented the massive retrograde cell death of immature axotomized rubrospinal neurons. Some of these rescued neurons projected to the host spinal cord caudal to the transplant.