Axonal outgrowth inhibitors and scar formation are two major obstacles to central nervous system (CNS) repair. No target molecule that regulates both axonal growth and scarring has been identified. Here we identified collapsin response mediator protein 4 (CRMP4), a common mediator of inhibitory signals after neural injury, as a crucial factor that contributes to both axonal growth inhibition and scarring after spinal cord injury (SCI). We found increases in the inhibitory and toxic forms of CRMP4 in injured spinal cord. Notably, CRMP4 expression was evident in inflammatory cells as well as in neurons after spinal cord transection. Crmp4-/- mice displayed neuroprotection against SCI and reductions in inflammatory response and scar formation. This permissive environment for axonal growth due to CRMP4 deletion restored locomotor activity at an unusually early phase of healing. These results suggest that deletion of CRMP4 is a unique therapeutic strategy that overcomes two obstacles to CNS repair after SCI.