With recent progress in neuroscience and stem-cell research, neural transplantation has emerged as a promising therapy for treating CNS diseases. The success of transplantation has been limited, however, by the restricted ability of neural implants to survive and establish neuronal connections with the host. Little is known about the mechanisms responsible for this failure. Neural implantation triggers reactive gliosis, a process accompanied by upregulation of intermediate filaments in astrocytes and formation of astroglial scar tissue. Here we show that the retinas of adult mice deficient in glial fibrillary acidic protein and vimentin, and consequently lacking intermediate filaments in reactive astrocytes and Müller cells, provide a permissive environment for grafted neurons to migrate and extend neurites. The transplanted cells integrated robustly into the host retina with distinct neuronal identity and appropriate neuronal projections. Our results indicate an essential role for reactive astroglial cells in preventing neural graft integration after transplantation.