In this study, we evaluated if the implantation of allogenic adipose-derived stem cells (ASCs) improved neurological function in a canine spinal cord injury model. Eleven adult dogs were assigned to three groups according to treatment after spinal cord injury by epidural balloon compression: C group (no ASCs treatment as control), V group (vehicle treatment with PBS), and ASC group (ASCs treatment). ASCs or vehicle were injected directly into the injured site 1 week after spinal cord injury. Pelvic limb function after transplantation was evaluated by Olby score. Magnetic resonance imaging, somatosensory evoked potential (SEP), histopathologic and immunohistichemical examinations were also performed. Olby scores in the ASC group increased from 2 weeks after transplantation and were significantly higher than C and V groups until 8 weeks (p < 0.05). However, there were no significant differences between the C and V groups. Nerve conduction velocity based on SEP was significantly improved in the ASC group compared to C and V groups (p < 0.05). Positive areas for Luxol fast blue staining were located at the injured site in the ASC group. Also, GFAP, Tuj-1 and NF160 were observed immunohistochemically in cells derived from implanted ASCs. These results suggested that improvement in neurological function by the transplantation of ASCs in dogs with spinal cord injury may be partially due to the neural differentiation of implanted stem cells.