The pyramidal neurons of the hippocampal CA1 region are essential for cognitive functions such as spatial learning and memory, and are selectively destroyed after cerebral ischemia. To analyze whether degenerated CA1 neurons are replaced by new neurons and whether such regeneration is associated with amelioration in learning and memory deficits, we have used a rat global ischemia model that provides an almost complete disappearance (to approximately 3% of control) of CA1 neurons associated with a robust impairment in spatial learning and memory at two weeks after ischemia. We found that transient cerebral ischemia can evoke a massive formation of new neurons in the CA1 region, reaching approximately 40% of the original number of neurons at 90 days after ischemia (DAI). Co-localization of the mature neuronal marker neuronal nuclei with 5-bromo-2'-deoxyuridine in CA1 confirmed that neurogenesis indeed had occurred after the ischemic insult. Furthermore, we found increased numbers of cells expressing the immature neuron marker polysialic acid neuronal cell adhesion molecule in the adjacent lateral periventricular region, suggesting that the newly formed neurons derive from this region. The reappearance of CA1 neurons was associated with a recovery of ischemia-induced impairments in spatial learning and memory at 90 DAI, suggesting that the newly formed CA1 neurons restore hippocampal CA1 function. In conclusion, these results show that the brain has an endogenous capacity to form new nerve cells after injury, which correlates with a restoration of cognitive functions of the brain.