The central nervous system has limited capacity for regeneration after traumatic injury. Transplantation of neural stem/progenitor cells (NPCs) has been proposed as a potential therapeutic approach while insulin-like growth factor I (IGF-I) has neuroprotective properties following various experimental insults to the nervous system. We have previously shown that NPCs transduced with a lentiviral vector for IGF-I overexpression have an enhanced ability to give rise to neurons in vitro but also in vivo, upon transplantation in a mouse model of temporal lobe epilepsy. Here we studied the regenerative potential of NPCs, IGF-I-transduced or not, in a mouse model of hippocampal mechanical injury. NPC transplantation, with or without IGF-I transduction, rescued the injury-induced spatial learning deficits as revealed in the Morris Water Maze. Moreover, it had beneficial effects on the host tissue by reducing astroglial activation and microglial/macrophage accumulation while enhancing generation of endogenous oligodendrocyte precursor cells. One or two months after transplantation the grafted NPCs had migrated towards the lesion site and in the neighboring myelin-rich regions. Transplanted cells differentiated toward the oligodendroglial, but not the neuronal or astrocytic lineages, expressing the early and late oligodendrocyte markers NG2, Olig2, and CNPase. The newly generated oligodendrocytes reached maturity and formed myelin internodes. Our current and previous observations illustrate the high plasticity of transplanted NPCs which can acquire injury-dependent phenotypes within the host CNS, supporting the fact that reciprocal interactions between transplanted cells and the host tissue are an important factor to be considered when designing prospective cell-based therapies for CNS degenerative conditions.