Spinal cord injury (SCI) in mammals leads to a robust inflammatory response followed by the formation of a glial and connective tissue scar that comprises a barrier to axonal regeneration. The inbred MRL/MpJ mouse strain exhibits reduced inflammation after peripheral injury and shows true regeneration without tissue scar formation following an ear punch wound. We hypothesized that following SCI, the unique genetic wound healing traits of this strain would result in reduced glial and connective tissue scar formation, increased axonal growth, and improved functional recovery. Adult MRL/MpJ and C57BL/6J mice were subjected to a mid-thoracic spinal contusion and the distribution of axon profiles and selected cellular and extracellular matrix components was compared at 1, 2, 4 and 6 weeks post-injury. Recovery of hind-limb locomotor function was assessed over the same time period. The MRL/MpJ mice exhibited robust axon growth within the lesion, beginning at 4 weeks post-injury. This growth was accompanied by reduced macrophage staining at 1, 2, 4 and 6 weeks post-injury, decreased chondroitin sulfate proteoglycan staining at 1-2 weeks and increased laminin staining throughout the lesion at 2-6 weeks post-injury. Paradoxically, the extent of locomotor recovery was impaired in the MRL/MpJ mice. Close examination of the chronic lesion site revealed evidence of ongoing degeneration both within and surrounding the lesion site. Thus, the regenerative genetic wound healing traits of the MRL/MpJ mice contribute to the evolution of a lesion environment that supports enhanced axon growth after SCI. However, this response occurs at the expense of meaningful functional recovery.