We examined the availability of human bone marrow stromal cells (MSCs) as a source of transplantation therapy in nerve injury. Human MSCs were subjected to a series of treatments with a reducing agent, retinoic acid and a combination of trophic factors. Morphologically and immunocytochemically, such treated cells differentiated into Schwann cell characteristics in vitro. Cells were filled into a transpermeable tube, transplanted into the gap made in the rat sciatic nerve of a rat and followed up to 3 weeks under the control of immunosuppressant. In contrast to untreated human MSCs, differentiated human MSCs expressed Schwann cell markers in vivo and supported regenerating axons. These results suggest that human MSCs can be induced to be a substitute for Schwann cells that may be applied for nerve regeneration. (c) 2007 Elsevier Inc. All rights reserved.