Thymosin beta4 (Tbeta4) is an actin-binding peptide whose expression in developing brain correlates with migration and neurite extension of neurons. Here, we studied the effects of the downregulation of Tbeta4 expression on growth and differentiation of murine neural progenitor cells (NPCs), using an antisense lentiviral vector. In differentiation-promoting medium, we found twice the number of neurons derived from the Tbeta4-antisense-transduced NPCs, which showed enhanced neurite outgrowth accompanied by increased expression of the adhesion complex N-cadherin-beta-catenin and increased ERK activation. Importantly, when the Tbeta4-antisense-transduced NPCs were transplanted in vivo into a mouse model of spinal cord injury, they promoted a significantly greater functional recovery. Locomotory recovery correlated with increased expression of the regeneration-promoting cell adhesion molecule L1 by the grafted Tbeta4-antisense-transduced NPCs. This resulted in an increased number of regenerating axons and in sprouting of serotonergic fibers surrounding and contacting the Tbeta4-antisense-transduced NPCs grafted into the lesion site. In conclusion, our data identify a new role for Tbeta4 in neuronal differentiation of NPCs by regulating fate determination and process outgrowth. Moreover, NPCs with reduced Tbeta4 levels generate an L1-enriched environment in the lesioned spinal cord that favors growth and sprouting of spared host axons and enhances the endogenous tissue-repair processes.