Reports based primarily on anatomical evidence suggest that olfactory ensheathing glia (OEG) transplantation promotes axon regeneration across a complete spinal cord transection in adult rats. Based on functional, electrophysiological, and anatomical assessments, we found that OEG promoted axon regeneration across a complete spinal cord transection and that this regeneration altered motor responses over time. At 7 months after transection, 70% of OEG-treated rats showed motor-evoked potentials in hindlimb muscles after transcranial electric stimulation. Furthermore, a complete spinal cord retransection performed 8 months after injury demonstrated that this axon regeneration suppressed locomotor performance and decreased the hypersensitive hindlimb withdrawal response to mechanical stimulation. OEG transplantation alone promoted reorganization of lumbosacral locomotor networks and, when combined with long-term training, enhanced some stepping measures. These novel findings demonstrate that OEG promote regeneration of mature axons across a complete transection and reorganization of spinal circuitry, both of which contribute to sensorimotor function.