Spinal cord injury can lead to severe motor, sensory and autonomic dysfunction. Currently, there is no effective treatment for the injured spinal cord. The transplantation of Schwann cells, neural stem cells or progenitor cells, olfactory ensheathing cells, oligodendrocyte precursor cells and mesenchymal stem cells has been investigated as potential therapies for spinal cord injury. However, little is known about the mechanisms through which these individual cell types promote repair and functional improvements. The five most commonly proposed mechanisms include neuroprotection, immunomodulation, axon regeneration, neuronal relay formation and myelin regeneration. A better understanding of the mechanisms whereby these cells promote functional improvements, as well as an appreciation of the obstacles in implementing these therapies and effectively modeling spinal cord injury, will be important to make cell transplantation a viable clinical option and may lead to the development of more targeted therapies.