Transplanted bone marrow stromal cells (BMSC) promote functional recovery after spinal cord injury (SCI) through multiple mechanisms. A Rho kinase inhibitor, Fasudil also enhances axonal regeneration. This study was aimed to evaluate whether combination therapy of BMSC transplantation and Fasudil further enhances axonal regeneration and functional recovery in rats subjected to SCI. Fasudil or vehicle was injected for 2 weeks. BMSC or vehicle transplantation into the rostral site of SCI was performed at 7 days after injury. Neurological symptoms were assessed throughout the experiments. Fluoro-Ruby was injected into the dorsal funiculus of the rostral site of SCI at 63 days after injury. The fate of the transplanted BMSC was examined using immunohistochemistry. BMSC transplantation significantly increased the number of Fluoro-Ruby -labeled fibers of the dorsal corticospinal tracts at the caudal site of SCI, enhancing functional recovery of the hind limbs. Some of the engrafted BMSC were positive for Fluoro-Ruby, neuronal specific nuclear protein and microtubule-associated protein-2, suggesting that they acquired neuronal phenotypes and built synaptic connection with the host's neural circuits. Fasudil treatment also improved axonal continuity, but did not promote functional recovery. Combination therapy dramatically increased the number of Fluoro-Ruby-labeled fibers of the dorsal corticospinal tracts at the caudal site of SCI, but did not further boost the therapeutic effects on locomotor function by BMSC transplantation. The findings suggest that BMSC transplantation and Fasudil provide synergistic effects on axon regeneration after SCI, although further studies would be necessary to further enhance functional recovery.