The chronic stage multiple sclerosis (MS), an inflammatory demyelinating disease of the central nervous system (CNS), remains refractory to current treatments. This refractory nature may be due to the fact that current treatments are primarily immunomodulatory, which prevent further demyelination but lack the capacity to promote remyelination. Several approaches, including transplantation of neural stem cells (NSCs) or antagonists to LINGO-1, a key part of the receptor complex for neuroregeneration inhibitors, have been effective in suppressing the acute stage of experimental autoimmune encephalomyelitis (EAE), an animal model of MS. However, their effect on the chronic stage EAE is not known. Here, we show that transplantation of NSCs had only a slight therapeutic effect when treatment started at the chronic stage of EAE (e.g., injected at day 40 postimmunization). However, NSCs engineered to produce LINGO-1-Fc, a soluble LINGO-1 antagonist, significantly promoted neurological recovery as demonstrated by amelioration of clinical signs, improvement in axonal integrity, and enhancement of oligodendrocyte maturation and neuron repopulation. Significantly enhanced NAD production and Sirt2 expression were also found in the CNS of mice treated with LINGO-1-Fc-producing NSC. Moreover, differentiation of LINGO-1-Fc-producing NSCs into oligodendrocytes in vitro was largely diminished by an NAMPT inhibitor, indicating that LINGO-1-Fc enhances the NAMPT/NAD/Sirt2 pathway. Together, our study establishes a CNS-targeted, novel LINGO-1-Fc delivery system using NSCs, which represents a novel and effective NSC-based gene therapy approach for the chronic stage of MS.