Glial scarring following severe tissue damage and inflammation after spinal cord injury (SCI) is due to an extreme, uncontrolled form of reactive astrogliosis that typically occurs around the injury site. The scarring process includes the misalignment of activated astrocytes and the deposition of inhibitory chondroitin sulfate proteoglycans. Here, we first discuss recent developments in the molecular and cellular features of glial scar formation, with special focus on the potential cellular origin of scar-forming cells and the molecular mechanisms underlying glial scar formation after SCI. Second, we discuss the role of glial scar formation in the regulation of axonal regeneration and the cascades of neuro-inflammation. Last, we summarize the physical and pharmacological approaches targeting the modulation of glial scarring to better understand the role of glial scar formation in the repair of SCI.