Spinal cord injury (SCI) is a devastating clinical problem that can lead to permanent motor dysfunction. Fingolimod (FTY720) is a sphingosine structural analogue, and recently, its therapeutic benefits in SCI have been reported. The present study aimed to evaluate the therapeutic efficacy of fingolimod‐incorporated poly lactic‐co‐glycolic acid (PLGA) nanoparticles (nanofingolimod) delivered locally together with neural stem/progenitor cells (NS/PCs) transplantation in a mouse model of contusive acute SCI. Fingolimod was encapsulated in PLGA nanoparticles by the emulsion–evaporation method. Mouse NS/PCs were harvested and cultured from embryonic Day 14 (E14) ganglionic eminences. Induction of SCI was followed by the intrathecal delivery of nanofingolimod with and without intralesional transplantation of PuraMatrix‐encapsulated NS/PCs. Functional recovery, injury size and the fate of the transplanted cells were evaluated after 28 days. The nanofingolimod particles represented spherical morphology. The entrapment efficiency determined by UV–visible spectroscopy was approximately 90%, and the drug content of fingolimod loaded nanoparticles was 13%. About 68% of encapsulated fingolimod was slowly released within 10 days. Local delivery of nanofingolimod in combination with NS/PCs transplantation led to a stronger improvement in neurological functions and minimized tissue damage. Furthermore, co‐administration of nanofingolimod and NS/PCs not only increased the survival of transplanted cells but also promoted their fate towards more oligodendrocytic phenotype. Our data suggest that local release of nanofingolimod in combination with three‐dimensional (3D) transplantation of NS/PCs in the acute phase of SCI could be a promising approach to restore the damaged tissues and improve neurological functions.