In this study, we used insulin-like growth factor-1 to induce bone marrow mesenchymal stem cells (MSCs) to differentiate into oligodendrocyte-like cells. Cell surface marker identification showed that they expressed myelin basic protein and galactosylceramide, two specific markers of oligodendrocytes. These cells were transplanted into rats with acute spinal cord injury at T-10. At 8 weeks post-implantation, oligodendrocyte-like cells were observed to have survived at the injury site. The critical angle of the inclined plane, and Basso, Beattie and Bresnahan scores were all increased. Furthermore, latencies of motion-evoked and somatosensory-evoked potentials were decreased. These results demonstrate that transplantation of oligodendrocytic-induced MSCs promote functional recovery of injured spinal cord.