One of the main research strategies to improve treatment for spinal cord injury involves the use of cell transplantation. This review looks at the advantages and possible caveats of using glial cells from the olfactory system in transplant-mediated repair. These glial cells, termed olfactory ensheathing cells (OECs), ensheath the axons of the olfactory receptor neurons. The primary olfactory system is an unusual tissue in that it can support neurogenesis throughout life. In addition, newly generated olfactory receptor neurons are able to grow into the CNS environment of the olfactory bulb tissue and reform synapses. It is thought that this unique regenerative property depends in part on the presence of OECs. OECs share some of the properties of both astrocytes and Schwann cells but appear to have advantages over these and other glial cells for CNS repair. In particular, OECs are less likely to induce hypertrophy of CNS astrocytes. As well as remyelinating demyelinated axons, OEC grafts appear to promote the restoration of functions lost following a spinal cord lesion. However, much of the evidence for this is based on behavioural tests, and the mechanisms that underlie their potential benefits in transplant-mediated repair remain to be clarified.