Hypoxic-ischemic encephalopathy (HIE) in neonates results in long-term disabilities. Stem cell therapy may offer an attractive treatment for HIE. Multipotent astrocytic stem cells (MASCs) from mice transplanted into a rat model of hypoxia-ischemia (HI) survived the transplantation and showed signs of migration towards the injured cortex. Some MASCs around the injured cortex differentiated into neuronal and astrocytic phenotypes. MASCs transplanted into non-ischemic pups survived but retained their astrocytic phenotype. These data suggest that transplanted MASCs can survive and differentiate into neurons and astrocytes in the post-injury milieu of the neonatal brain injured by HI.