Acute traumatic spinal cord injury (SCI) is marked by the enhanced production of local cytokines and pro-inflammatory substances that induce gliosis and prevent reinnervation. The transplantation of stem cells is a promising treatment strategy for SCI. In order to facilitate functional recovery, we employed stem cell therapy alone or in combination with curcumin, a naturally-occurring anti-inflammatory component of turmeric (Curcuma longa), which potently inhibits NF-κB. Spinal cord contusion following laminectomy (T9–10) was performed using a weight drop apparatus (10 g over a 12.5 or 25 mm distance, representing moderate or severe SCI, respectively) in Sprague-Dawley rats. Neural stem cells (NSC) were isolated from subventricular zone (SVZ) and transplanted at the site of injury with or without curcumin treatment. Functional recovery was assessed by BBB score and body weight gain measured up to 6 weeks following SCI. At the conclusion of the study, the mass of soleus muscle was correlated with BBB score and body weight. Stem cell therapy improved recovery from moderate SCI, however, it had a limited effect on recovery after severe SCI. Curcumin stimulated NSC proliferation in vitro, and in combination with stem cell therapy, induced profound recovery from severe SCI as evidenced by improved functional locomotor recovery, increased body weight, and soleus muscle mass. These findings demonstrate that curcumin in conjunction with stem cell therapy synergistically improves recovery from severe SCI. Furthermore, our results indicate that the effect of curcumin extends beyond its known anti-inflammatory properties to the regulation of stem cell proliferation.