Currently available therapeutics has been less effective in promoting functional recovery from stroke or other injuries in the central nervous system (CNS). Axonal damage is a characteristic pathology seen in CNS injuries. Previously, it was reported that Nogo-A extracellular peptide residues 1-40 (NEP1-40), a competitive antagonist of Nogo-66 receptor (NgR1), has the ability to promote axonal regrowth and functional recovery after CNS injury. However, delivery of the therapeutic proteins into the brain parenchyma is limited due to its inability to cross the blood-brain barrier (BBB). We first generated a biologically active NEP1-40 fusion protein containing the protein transduction domain (PTD) of the transactivator of transcription (TAT), TAT-NEP1-40, which crosses the BBB in vivo after systemic delivery. The TAT-NEP1-40 can protect PC12 cells against oxygen and glucose deprivation (OGD) and promote neurite outgrowth when added exogenously to culture medium. The TAT-NEP1-40 protein transduced into the brain continued to sustain biological activities and protected the brain against ischemia/reperfusion injury through inhibition of neuronal apoptosis. Collectively, our data suggest that TAT-NEP1-40 may be a novel therapeutic candidate for axonal regeneration and functional recovery from CNS injuries such as cerebral hypoxia-ischemia, cerebral hemorrhage, brain trauma, and also for spinal cord injury.