BACKGROUND: Transplantation of nasal mucosa-derived mesenchymal stem cells (EMSCs) overexpressing neuropeptide S (NPS) is a promising approach for treating spinal cord injury (SCI). Despite the potential of stem cell therapy, challenges remain regarding cell survival and differentiation control. We aimed to conduct orthotopic transplantation of transected spinal cord to treat rats with complete SCI. METHODS: In this study, we loaded NPS-overexpressing EMSCs onto hydrogels to enhance cell survival in vivo and promote neuronal differentiation both in vitro and in vivo. However, in vitro co-culture promoted greater neuronal differentiation of neural stem cells (P <
0.01). When transplanted in vivo, NPS-overexpressing EMSCs showed greater cell survival in the transplanted area compared with stem cells without gene modification within 4 weeks after spinal cord implantation in rats (P <
0.01). RESULTS: Compared with those in the other groups, stable overexpression of NPS-EMSCs in a rat model with SCI significantly improved the treatment effect, reduced glial scar formation, promoted neural regeneration and endogenous neural stem cell proliferation and differentiation into neurons, and improved motor function. CONCLUSIONS: These results indicate that this effect may be achieved by the overexpression of NPS-EMSCs through the activation of the PI3K/Akt/GSK3β signaling pathway. Overall, the overexpression of EMSCs significantly improved the therapeutic effect of SCI in rats, strongly supporting the potential for gene modification of mesenchymal stem cells in clinical applications.