Neural stem cells (NSCs) transplantation is an attractive and promising treatment strategy for spinal cord injury (SCI). Various pathological processes including the severe inflammatory cascade and difficulty in stable proliferation and differentiation of NSCs limit its application and translation. Here, a novel physico‐chemical bifunctional neural stem cells delivery system containing magnetic nanoparticles (MNPs and methylprednisolone (MP) is designed to repair SCI, the former regulates NSCs differentiation through magnetic mechanical stimulation in the chronic phase, while the latter alleviates inflammatory response in the acute phase. The delivery system releases MP to promote microglial M2 polarization, inhibit M1 polarization, and reduce neuronal apoptosis. Meanwhile, NSCs tend to differentiate into functional neurons with magnetic mechanical stimulation generated by MNPs in the static magnetic field, which is related to the activation of the PI3K/AKT/mTOR pathway. SCI mice achieve better functional recovery after receiving NSCs transplantation via physico‐chemical bifunctional delivery system, which has milder inflammation, higher number of M2 microglia, more functional neurons, and axonal regeneration. Together, this bifunctional NSCs delivery system combined physical mechanical stimulation and chemical drug therapy is demonstrated to be effective, which provides new treatment insights into clinical transformation of SCI repair.