Injury to the spinal cord or peripheral nerves can lead to the development of allodynia due to the loss of inhibitory tone involved in spinal sensory function. The potential of intraspinal transplants of GABAergic cells to restore inhibitory tone and thus decrease pain behaviors in a rat model of neuropathic pain was investigated. Allodynia of the left hind paw was induced in rats by unilateral L5- 6 spinal nerve root ligation. Mechanical sensitivity was assessed using von Frey filaments. Postinjury, transgenic fetal green fluorescent protein mouse GABAergic cells or human neural precursor cells (HNPCs) expanded in suspension bioreactors and differentiated into a GABAergic phenotype were transplanted into the spinal cord. Control rats received undifferentiated HNPCs or cell suspension medium only. Animals that received either fetal mouse GABAergic cell or differentiated GABAergic HNPC intraspinal transplants demonstrated a significant increase in paw withdrawal thresholds at 1 week post-transplantation that was sustained for 6 weeks. Transplanted fetal mouse GABAergic cells demonstrated immunoreactivity for glutamic acid decarboxylase and GABA that colocalized with green fluorescent protein. Intraspinally transplanted differentiated GABAergic HNPCs demonstrated immunoreactivity for GABA and beta-III tubulin. In contrast, intraspinal transplantation of undifferentiated HNPCs, which predominantly differentiated into astrocytes, or cell suspension medium did not affect any behavioral recovery. Intraspinally transplanted GABAergic cells can reduce allodynia in a rat model of neuropathic pain. In addition, HNPCs expanded in a standardized fashion in suspension bioreactors and differentiated into a GABAergic phenotype may be an alternative to fetal cells for cell-based therapies to treat chronic pain syndromes.