This paper describes the evaluation of the auto-catalytic anti-oxidant behavior and biocompatibility of cerium oxide nanoparticles for applications in spinal cord repair and other diseases of the central nervous system. The application of a single dose of nano-ceria at a nano-molar concentration is biocompatible, regenerative and provides a significant neuroprotective effect on adult rat spinal cord neurons. Retention of neuronal function is demonstrated from electrophysiological recordings and the possibility of its application to prevent ischemic insult is suggested from an oxidative injury assay. A mechanism is proposed to explain the auto-catalytic properties of these nanoparticles.