Thrombo-occlusive cerebrovascular disease resulting in stroke and permanent neuronal loss is an important cause of morbidity and mortality. Because of the unique properties of cerebral vasculature and the limited reparative capability of neuronal tissue, it has been difficult to devise effective neuroprotective therapies in cerebral ischemia. Our results demonstrate that systemic administration of human cord blood-derived CD34(+) cells to immunocompromised mice subjected to stroke 48 hours earlier induces neovascularization in the ischemic zone and provides a favorable environment for neuronal regeneration. Endogenous neurogenesis, suppressed by an antiangiogenic agent, is accelerated as a result of enhanced migration of neuronal progenitor cells to the damaged area, followed by their maturation and functional recovery. Our data suggest an essential role for CD34(+) cells in promoting directly or indirectly an environment conducive to neovascularization of ischemic brain so that neuronal regeneration can proceed.