To characterize the fate of allogeneic neural stem cells (NSCs) following transplantation into injured spinal cord, green fluorescent protein (GFP)-NSCs isolated from GFP transgenic Sprague–Dawley rat embryos were transplanted into contused spinal cords of Wistar rats. The GFP-NSCs survived for at least 6 months in injured spinal cord; most of them differentiated rapidly into astrocytes, and a few were able to undergo proliferation. After transplantation, the GFP-NSCs remained in the transplantation site at the early stage, and then migrated along white-matter, and gathered around the injured cavity. At 6 months post-transplantation, CD8 T-lymphocytes infiltrated the spinal cord, and mixed lymphocyte culture from host and donor showed that lymphocytes from the host spleen were primed by allogeneic GFP-NSCs. At 12 months post-transplantation, most GFP cells in the spinal cord lost their morphology and disintegrated. The Basso, Beattie and Bresnahan score and footprint analysis indicated that the improvement of locomotor function in transplanted rats appeared only at the early stage, and was not seen even at 6 months after transplantation All these results suggest that the allogeneic NSCs, after transplantation into injured spinal cord, activate the host immune system. Therefore, if immunosuppressive agents are not used, the grafted allogeneic NSCs, although they can survive for a long time, are subjected to host immune rejection, and the effect of NSCs on functional recovery is limited.