Olfactory Ensheathing Cells (OECs) ensheathe unmyelinated olfactory axons and exhibit antigenic and morphological characteristics both of astrocytes and of Schwann Cells (SCs). As a matter of fact they express an astrocyte-specific marker (GFAP) and low-affinity p75 nerve growth factor receptor (p75 NGFr), S100, as well as adhesion molecules such as laminin and N-CAM like SCs. Immunocytochemical studies reveal that OECs are able to produce different growth and survival factors. In vitro, OECs promote axonal growth, probably by secretion of neurotrophic growth factors that support axonal elongation and extension. In vivo studies have shown that OECs can form myelin promoting remyelination of damaged axons. In fact, when transplanted, they stimulate extensive sprouting and axonal regeneration of multiple axons. As OECs appear to exert a neuroprotective effect for functional restoration and for neural plasticity in neurodegenerative disorders, they might be considered a suitable approach to functional recovery. These data establish OECs as prime candidates for transplantation, showing some advantages over SC thanks to their different capacity to intermingle with astrocytes after implantation in lesion sites.