The olfactory system is the only area in which adult nerve fibers can regenerate into the CNS not only after injury, but also throughout adult life in the absence of injury. The olfactory ensheathing cells (OECs) can be cultured from olfactory bulb or mucosa and have become one of the most promising candidates for repairing of CNS injuries. The OECs have a unique arrangement in which they give rise to very fine cytoplasmic processes that enclose large numbers of unmyelinated olfactory axons, accompanying them from the olfactory mucosa all the way to their synaptic terminals in the olfactory bulb. We have transplanted cultured OECs into lesioned rat spinal cord and found that the transplanted cells are able to induce regeneration of the cut nerve fibres and restore the original pathway. This results in the functional recovery of a forepaw retrieval task, climbing and breathing. When OECs were transplanted into severed optic nerve, the cells induce regeneration of cut adult retinal ganglion cell axons. We have also developed a matrix transfer method of transplanting OECs which supports regeneration of severed dorsal root axons into the spinal cord. The regenerating axons are able to enter the grey matter of the dorsal horn and send axons both rostrally and caudally for at least 10 mm in the white matter of the ascending dorsal columns. Repair of dorsal roots in the brachial plexus allows return of use of the forearm and forepaw in climbing. These encouraging results provide proof of principle whose future development could lead to clinical application to human brachial plexus avulsion and glaucoma.