The aim of this study is to understand if human mesenchymal stem cells (hMSCs) and neuropeptide pituitary adenylate cyclase-activating polypeptide (PACAP) have synergistic protective effect that promotes functional recovery in rats with severe spinal cord injury (SCI). To evaluate the effect of delayed combinatorial therapy of PACAP and hMSCs on spinal cord tissue repair, we used the immortalized hMSCs that retain their potential of neuronal differentiation under the stimulation of neurogenic factors and possess the properties for the production of several growth factors beneficial for neural cell survival. The results indicated that delayed treatment with PACAP and hMSCs at day 7 post SCI increased the remaining neuronal fibers in the injured spinal cord, leading to better locomotor functional recovery in SCI rats when compared to treatment only with PACAP or hMSCs. Western blotting also showed that the levels of antioxidant enzymes, Mn-superoxide dismutase (MnSOD) and peroxiredoxin-1/6 (Prx-1 and Prx-6), were increased at the lesion center 1 week after the delayed treatment with the combinatorial therapy when compared to that observed in the vehicle-treated control. Furthermore, in vitro studies showed that co-culture with hMSCs in the presence of PACAP not only increased a subpopulation of microglia expressing galectin-3, but also enhanced the ability of astrocytes to uptake extracellular glutamate. In summary, our in vivo and in vitro studies reveal that delayed transplantation of hMSCs combined with PACAP provides trophic molecules to promote neuronal cell survival, which also foster beneficial microenvironment for endogenous glia to increase their neuroprotective effect on the repair of injured spinal cord tissue.