In the present study, following previous experience with electrolytic lesion of the rat brain, and subsequent reduction of reactive gliosis with 7 beta-hydroxycholesterol derivatives (Bochelen et al.: Neuroscience 51:827-834, 1992), we have performed a hemisection of the spinal cord in adult rats and investigated the influence of 7 beta-hydroxycholesteryl-3-oleate (oxysterol) on the intensity of the astrocytic reaction and the axonal regeneration. We have shown here that local administration of liposomes containing this oxysterol reduced the intensity of the astroglial reaction on the sectioned side, as seen with immunocytochemical detection of glial fibrillary acidic protein (GFAP) and by in situ hybridization with a specific RNA probe. Moreover, radioautographic evaluation of astrocyte proliferation with tritiated thymidine evidenced a reduction of the astrocyte labelling index. In addition, double immunocytochemical detection of GFAP and polysialylated neural cell adhesion molecule (E-NCAM) revealed a decrease of the expression of this molecule in reactive astrocytes of the treated animals. Finally, immunocytochemical detection of serotonin (5HT) was determined in the raphespinal projections, which constitute a major descending system. In treated animals, serotonergic axons originating from the intact side reinnervated the dorsal horn of the sectioned side, below the hemisection. These results demonstrate that 7 beta-hydroxycholesteryl-3-oleate can reduce the astrocytic reaction following spinal cord injury, promoting the serotonergic reinnervation of a denervated territory.