Recently, cell-based therapy has been highlighted as an alternative to treating ischemic brain damage in stroke patients. The present study addresses the therapeutic potential of polysialic acid-neural cell adhesion molecule (PSA-NCAM)-positive neural precursor cells (NPC(PSA-NCAM+)) derived from human embryonic stem cells (hESCs) in a rat stroke model with permanent middle cerebral artery occlusion. Data showed that rats transplanted with NPC(PSA-NCAM+) are superior to those treated with phosphate buffered saline (PBS) or mesenchymal stem cells (MSCs) in behavioral performance throughout time points. In order to investigate its underlying events, immunohistochemical analysis was performed on rat ischemic brains treated with PBS, MSCs, and NPC(PSA-NCAM+). Unlike MSCs, NPC(PSA-NCAM+) demonstrated a potent immunoreactivity against human specific nuclei, doublecortin, and Tuj1 at day 26 post-transplantation, implying their survival, differentiation, and integration in the host brain. Significantly, NPC(PSA-NCAM+) evidently lowered the positivity of microglial ED-1 and astrocytic GFAP, suggesting a suppression of adverse glial activation in the host brain. In addition, NPC(PSA-NCAM+) elevated α-SMA(+) immunoreactivity and the expression of angiopoietin-1 indicating angiogenic stimulation in the host brain. Taken together, the current data demonstrate that transplanted NPC(PSA-NCAM+) preserve brain tissue with reduced infarct size and improve behavioral performance through actions encompassing anti-reactive glial activation and pro-angiogenic activity in a rat stroke model. In conclusion, the present findings support the potentiality of NPC(PSA-NCAM+) as the promising source in the development of cell-based therapy for neurological diseases including ischemic stroke.