Here we describe transplantation of olfactory ensheathing cells (OECs) or Schwann cells derived from transgenic pigs expressing the human complement inhibitory protein, CD59 (hCD59), into transected dorsal column lesions of the spinal cord of the immunosuppressed rat to induce axonal regeneration. Non-transplanted lesion-controlled rats exhibited no impulse conduction across the transection site, whereas in animals receiving transgenic pig OECs or Schwann cells impulse conduction was restored across and beyond the lesion site for more than a centimeter. Cell labeling indicated that the donor cells migrated into the denervated host tract. Conduction velocity measurements showed that the regenerated axons conducted impulses faster than normal axons. By morphological analysis, the axons seemed thickly myelinated with a peripheral pattern of myelin expected from the donor cell type. These results indicate that xenotranplantation of myelin-forming cells from pigs genetically altered to reduce the hyperacute response in humans are able to induce elongative axonal regeneration and remyelination and restore impulse conduction across the transected spinal cord.