Attempts to promote host regeneration after spinal cord injury (SCI) have often resulted in poor axon extension due to formation of a glial scar, which creates a dense physical barrier around the injury and contains molecules that inhibit regeneration and repair of adult injured axons. Previous studies have shown that, while transplants of multipotent neural stem cells (NSC) integrate poorly in the injury site, the use of neuronal-restricted precursor cells (NRP) together with glial-restricted precursor cells (GRP) allow differentiation and integration of neurons, possibly because NRP are able to overcome chondroitin sulfate proteoglycan (CSPG) inhibition. To investigate this possibility, we grew mixed cultures of NRP/GRP on CSPG at inhibitory concentrations, using embryonic hippocampal cultures as controls. We found that NRP/GRP grown on CSPG survive and differentiate into neurons with no significant changes in neurite length, relative to growth on control polylysine substrate, and in contrast to a significant inhibition of axon growth in hippocampal cultures grown on CSPG-coated substrate. There was, however, a significant decrease in neurite number and branching in both cultures, indicating that CSPG also has important effects on neuronal morphology. These data suggest that embryonic neurons supported by glial cells derived from NRP/GRP transplants are less sensitive to inhibitory effects of CSPG in the glial scar, and are thus an appropriate source for neuronal cell replacement and reconnection of damaged circuits after SCI.