Recent studies have shown that bone marrow-derived MSCs (BM-MSCs) improve neurological deficits when transplanted into animal models of neurological disorders. However, the precise mechanism by which this occurs remains unknown. Herein we demonstrate that BM-MSCs are able to promote neuronal networks with functional synaptic transmission after transplantation into Niemann-Pick disease type C (NP-C) mouse cerebellum. To address the mechanism by which this occurs, we used gene microarray, whole-cell patch-clamp recordings, and immunohistochemistry to evaluate expression of neurotransmitter receptors on Purkinje neurons in the NP-C cerebellum. Gene microarray analysis revealed upregulation of genes involved in both excitatory and inhibitory neurotransmission encoding subunits of the ionotropic glutamate receptors (alpha-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid, AMPA) GluR4 and GABA(A) receptor beta2. We also demonstrated that BM-MSCs, when originated by fusion-like events with existing Purkinje neurons, develop into electrically active Purkinje neurons with functional synaptic formation. This study provides the first in vivo evidence that upregulation of neurotransmitter receptors may contribute to synapse formation via cell fusion-like processes after BM-MSC transplantation into mice with neurodegenerative disease. Disclosure of potential conflicts of interest is found at the end of this article.