Background and Objective: Spinal cord injury (SCI) has a high incidence rate in the world. However, until recently, there has been no reliable treatment available for its sensory and motor complications. Utilization of stem cells has opened new insights for treatment of SCI. Hair follicle stem cells (HFSCs) are multipotent, have high proliferative potential, and easily accessible. Here, we isolated HFSCs and transplanted them to Rats with spinal cord injury by compression model. Materials and Methods: HFSCs were isolated from the bulge area of Wistar rat whisker follicles. The SCI model was induced in 14 rats, and cultivated HFSCs were transplanted to the spinal cord lesion sites. Functional recovery was assessed by Basso–Beattie–Bresnahan (BBB) scale and muscular activity changes were evaluated with electromyography (EMG) 8 weeks following the transplantation. Results: Behavioral assessments with BBB test showed that scores in transplanted animals were higher than the control group. Functional recovery in the transplanted group were better eight weeks after transplantation (p=0.023) and BBB scores were 15.64 ±0.32 compared to 12.8 ±0.45 in the sham group. Moreover, the signal amplitude of the needle EMG records of the lower extremity muscles increased in transplanted rats. Conclusion: Our results show that transplantation of HFSCs to the site of SCI could be useful for repair and replacement of degenerated neuronal and glial cells.