Background/Aims: Neonatal hypoxia-ischemia (HI) causes severe brain damage and significantly increases neonatal morbidity and mortality. Increasing evidences have verified that stem cell-based therapy has the potential to rescue the ischemic tissue and restore function via secreting growth factors after HI. Here, we had investigated whether intranasal neural stem cells (NSCs) treatment improves the recovery of neonatal HI, and NSCs overexpressing basic fibroblast growth factor (bFGF) has a better therapeutic effect for recovery than NSCs treatment only. Methods: We performed permanent occlusion of the right common carotid artery in 9-day old ICR mice as animal model of neonatal hypoxia-ischemia. At 3 days post-HI, NSC, NSC-GFP, NSC-bFGF and vehicle were delivered intranasally. To determine the effect of intranasal NSC, NSC-GFP and NSC-bFGF treatment on recovery after HI, we analyzed brain damage, sensor-motor function and cell differentiation. Results: It was observed that intranasal NSC, NSC-GFP and NSC-bFGF treatment decreased gray and white matter loss area in comparison with vehicle-treated mouse. NSC, NSC-GFP and NSC-bFGF treatment also significantly improved sensor motor function in cylinder rearing test and adhesive removal test, however, NSC-bFGF-treatment was more effective than NSC-treatment in the improvement of somatosensory function. Furthermore, compared with NSC and NSC-GFP, NSC-bFGF treatment group appeared to differentiate into more neurons. Conclusion: Taken together, intranasal administration of NSCs is a promising therapy for treatment of neonatal HI, but NSCs overexpressing bFGF promotes the survival and differentiation of NSCs, and consequently achieves a better therapeutic effect in improving recovery after neonatal HI.