Umbilical cord blood (UCB) is a rich source of hematopoetic stem cells (HSCs). We have isolated a novel cell line population of stem cells from human UCB that exhibit properties of self-renewal, but do not have cell-surface markers that are typically found on HSCs. Analysis of transcripts revealed that these cells express transcription factors Oct-4, Rex-1, and Sox-2 that are typically expressed by stem cells. We refer to these novel cells as nonhematopoietic umbilical cord blood stem cells (nh-UCBSCs). Previous studies have shown that the intravenous infusion of UCBCs can ameliorate neurological deficits arising from ischemic brain injury. The identity of the cells that mediate this restorative effect, however, has yet to be determined. We postulate that nh-UCBSCs may be a source of the UCB cells that can mediate these effects. To test this hypothesis, we intravenously injected one million human nh-UCBSCs into rats 48 h after transient unilateral middle cerebral artery occlusion. Animals in other experimental groups received either saline injections or injections of RN33b neural stem cells. Animals were tested for neurological function before the infusion of nh-UCBSCs and at various time periods afterwards using a battery of behavioral tests. In limb placement tests, animals treated with nh-UCBSCs exhibited mean scores that were significantly better than animals treated with RN33b neural stem cells or saline. Similarly, in stepping tests, nh-UCBSC-treated animals again exhibited significantly better performance than the other experimental groups of animals. Analysis of infarct volume revealed that ischemic animals treated with nh-UCBSCs exhibited a 50% reduction in lesion volume in comparison to saline-treated controls. Histological analysis of brain tissue further revealed the presence of cells that stained for human nuclei. Some human nuclei-positive cells were also co-labeled for NeuN, indicating that the transplanted cells expressed markers of a neuronal phenotype. Cells expressing the human nuclei marker within the brain, however, were rather scant, suggesting that the restorative effects of nh-UCBSCs may be mediated by mechanisms other than cell replacement. To test this hypothesis, nh-UCBSCs were directly transplanted into the brain parenchyma after ischemic brain injury. Sprouting of nerve fibers from the nondamaged hemisphere into the ischemically damaged side of the brain was assessed by anterograde tracing using biotinylated dextran amine (BDA). Animals with nh-UCBSC transplants exhibited significantly greater densities of BDA-positive cells in the damaged side of the brain compared to animals with intraparenchymal saline injections. These results suggest that restorative effects observed with nh-UCBSC treatment following ischemic brain injury may be mediated by trophic actions that result in the reorganization of host nerve fiber connections within the injured brain.