Progesterone is an anti-inflammatory and promyelinating agent after spinal cord injury, but its effectiveness on functional recovery is still controversial. In the current study, we tested the effects of chronic progesterone administration on tissue preservation and functional recovery in a clinically relevant model of spinal cord lesion (thoracic contusion). Using magnetic resonance imaging, we observed that progesterone reduced both volume and rostrocaudal extension of the lesion at 60 days post-injury. In addition, progesterone increased the number of total mature oligodendrocytes, myelin basic protein immunoreactivity, and the number of axonal profiles at the epicenter of the lesion. Further, progesterone treatment significantly improved motor outcome as assessed using the Basso-Bresnahan-Beattie scale for locomotion and CatWalk gait analysis. These data suggest that progesterone could be considered a promising therapeutical candidate for spinal cord injury.