Infusion of nerve growth factor (NGF) has been shown to be neuroprotective following traumatic brain injury (TBI). In this study, we tested the hypothesis that NGF-expressing human NT2N neurons transplanted into the basal forebrain of brain-injured mice can attenuate long-term cognitive dysfunction associated with TBI. Undifferentiated NT2 cells were transduced in vitro with a lentiviral vector to release NGF, differentiated into NT2N neurons by exposure to retinoic acid and transplanted into the medial septum of mice 24 h following controlled cortical impact (CCI) brain injury or sham injury. Adult mice (n = 78) were randomly assigned to one of four groups: (1) sham-injured and vehicle (serum-free medium)-treated, (2) brain-injured and vehicle-treated, (3) brain-injured engrafted with untransduced NT2N neurons, and (4) brain-injured engrafted with transduced NGF-NT2N neurons. All groups were immunosuppressed daily with cyclosporin A (CsA) for 4 weeks. At 1 month post-transplantation, animals engrafted with NGF-expressing NT2N neurons showed significantly improved learning ability (evaluated with the Morris water maze) compared to brain-injured mice receiving either vehicle (p < 0.05) or untransduced NT2N neurons (p < 0.01). No effect of NGF-secreting NT2N cells on motor function deficits at 1-4 weeks post-transplantation was observed. These data suggest that NGF gene therapy using transduced NT2N neurons (as a source of delivery) may selectively improve cognitive function following TBI.