New neurons are continuously added in specific regions of the adult mammalian central nervous system. These neurons are derived from multipotent stem cells whose identity has been enigmatic. In this work, we present evidence that ependymal cells are neural stem cells. Ependymal cells give rise to a rapidly proliferating cell type that generates neurons that migrate to the olfactory bulb. In response to spinal cord injury, ependymal cell proliferation increases dramatically to generate migratory cells that differentiate to astrocytes and participate in scar formation. These data demonstrate that ependymal cells are neural stem cells and identify a novel process in the response to central nervous system injury.