Activation of endogenous stem cells has been proposed as a novel form of therapy in a variety of neurologic disorders including traumatic brain injury (TBI). Vascular endothelial growth factor (VEGF) is expressed in the brain after TBI and serves as a potent activator of angiogenesis and neurogenesis. In this study, we infused exogenous VEGF into the lateral ventricles of mice for 7 days after TBI using mini-osmotic pumps to evaluate the effects on recovery and functional outcome. The results of our study show that VEGF significantly increases the number of proliferating cells in the subventricular zone and in the perilesion cortex. Fate analysis showed that most newborn cells differentiated into astrocytes and oligodendroglia and only a few cells differentiated into neurons. Functional outcome was significantly better in mice treated with VEGF compared with vehicle-treated animals after TBI. Injury size was significantly smaller at 90 days after TBI in VEGF-treated animals, suggesting additional neuroprotective effects of VEGF. In conclusion, VEGF significantly augments neurogenesis and angiogenesis and reduces lesion volumes after TBI. These changes are associated with significant improvement in recovery rates and functional outcome.