Schwann cell (SC) grafts support the regeneration of axons of numerous spinal cord neurons when placed into transected adult rat midthoracic spinal cord. Clinically, methylprednisolone (MP) has been shown to be neuroprotective if administered within 8 h after spinal cord injury. We investigated whether axonal regrowth into SC grafts is enhanced when MP is administered at the time of spinal cord transection and SC implantation. SCs from adult rat sciatic nerves were purified in culture, suspended in Matrigel, and drawn into semipermeable polymeric channels. MP (30 mg/kg) or vehicle (control) was administered intravenously at 5 min, 2 h, and 4 h to adult Fischer rats after transection at T8 and removal of the next three caudal segments. The rostral cord stump was inserted 1 mm into the channel; the distal end of the channel was capped. Thirty to forty-five days later, the SC/MP group showed large tissue cables in the channels and host cord tissue retained in the rostral end of the channels. Significantly more myelinated axons (1159 +/- 308) were present at the 5-mm level in SC/MP grafts (n = 6) than in SC/vehicle cables (355 +/- 108, n = 5). More unmyelinated than myelinated axons (approximately 4:1, n = 3) were resolved in the cables by electron microscopy. In the SC/MP group, unlike the SC/vehicle group, serotonergic and noradrenergic fibers were detected immunocytochemically 2.5 and 2.0 mm respectively, into the graft; astrocytes were also identified at similar distances from the interface. Fast Blue retrograde tracing (SC/MP, n = 4; SC/vehicle, n = 3) showed that more spinal cord neurons (1116 +/- 113 vs 284 +/- 88, respectively) and spinal cord neurons more distant from the graft (C8 vs C5) responded by extending axons into the graft in the presence of MP. Also, very significantly, supraspinal brain stem neurons extended axons into the graft only when MP was administered (mean 46 vs 0, n = 3). These results indicate that MP improves axonal regenerationn from both spinal cord and brain stem neurons into thoracic SC grafts, possibly by reducing secondary host tissue loss adjacent to the graft.