Following spinal cord injury (SCI), immune-mediated secondary processes exacerbate the extent of permanent neurological deficits. We investigated the capacity of adult bone marrow-derived stem cells, which exhibit immunomodulatory properties, to alter inflammation and promote recovery following SCI. In vitro, we show that human multipotent adult progenitor cells (MAPCs) have the ability to modulate macrophage activation, and prior exposure to MAPC secreted factors can reduce macrophage-mediated axonal dieback of dystrophic axons. Using a contusion model of SCI, we found that intravenous delivery of MAPCs one day, but not immediately, after SCI significantly improves urinary and locomotor recovery, which was associated with marked spinal cord tissue sparing. Intravenous MAPCs altered the immune response in the spinal cord and periphery, however biodistribution studies revealed that no MAPCs were found in the cord and instead preferentially homed to the spleen. Our results demonstrate that MAPCs exert their primary effects in the periphery and provide strong support for the use of these cells in acute human contusive SCI.