Spinal cord injury (SCI) causes loss of neural functions below the level of the lesion due to interruption of spinal pathways and secondary neurodegenerative processes. The transplant of neural stem sells (NSCs) is a promising approach for the repair of SCI. Reprogramming of adult somatic cells into induced pluripotent stem cells (iPSC) is expected to provide an autologous source of iPSC-derived NSCs avoiding the immune response as well as ethical issues. However, there is still limited information on the behavior and differentiation pattern of transplanted iPSC-derived NSCs within the damaged spinal cord. We transplanted iPSC-derived NSCs, obtained from adult human somatic cells, to rats at 0 or 7 days after SCI, and evaluated motor evoked potentials and locomotion of the animals. We histologically analyzed engraftment, proliferation and differentiation of the iPSC-derived NSCs and the spared tissue in the spinal cords at 7, 21 and 63 days post-transplant. Both transplanted groups showed a late decline in functional recovery compared to vehicle-injected groups. Histology showed proliferation of transplanted cells within the tissue, forming a cell mass. Most grafted cells differentiated to neural and astroglial lineages, but not to oligodendrocytes. Some cells remained still undifferentiated and proliferating at final time points. The proinflammatory ambiance of the injured spinal cord induced proliferation of the grafted cells. Therefore, iPSC-derived NSCs cells have a potential risk for transplantation. New approaches are needed to promote and guide cell differentiation, as well as reducing their tumorigenicity once the cells are transplanted at the lesion site.