Recent studies have mostly focused on engraftment of cells at the lesioned spinal cord, with the expectation that differentiated neurons facilitate recovery. Only a few studies have attempted to use transplanted cells and/or biomaterials as major modulators of the spinal cord injury microenvironment. Here, we aimed to investigate the role of microenvironment modulation by cell graft on functional recovery after spinal cord injury. Induced neural stem cells reprogrammed from human peripheral blood mononuclear cells, and/or thrombin plus fibrinogen, were transplanted into the lesion site of an immunosuppressed rat spinal cord injury model. Basso, Beattie and Bresnahan score, electrophysiological function, and immunofluorescence/histological analyses showed that transplantation facilitates motor and electrophysiological function, reduces lesion volume, and promotes axonal neurofilament expression at the lesion core. Examination of the graft and niche components revealed that although the graft only survived for a relatively short period (up to 15 days), it still had a crucial impact on the microenvironment. Altogether, induced neural stem cells and human fibrin reduced the number of infiltrated immune cells, biased microglia towards a regenerative M2 phenotype, and changed the cytokine expression profile at the lesion site. Graft-induced changes of the microenvironment during the acute and subacute stages might have disrupted the inflammatory cascade chain reactions, which may have exerted a long-term impact on the functional recovery of spinal cord injury rats.