Glial cells, including astrocytes and macrophages/microglia, are thought to modulate pathological states following spinal cord injury (SCI). In the present study, we evaluated the therapeutic effects of interferon-γ (IFN-γ), which is one of the cytokines regulating glial function, in a mouse contusive SCI model. We found that intraperitoneal injection of IFN-γ significantly facilitated locomotor improvement following SCI. Immunohistochemistry demonstrated that IFN-γ decreased the accumulation of chondroitin sulfate proteoglycans (CSPGs), which are critical axon outgrowth inhibitors produced by reactive astrocytes in the injured central nervous system (CNS). Quantitative real-time polymerase chain reaction (RT-PCR) and Western blotting demonstrated that neurocan, one of several CSPGs, was reduced in the spinal cords of IFN-γ-treated mice compared to vehicle-treated mice. Consistently, IFN-γ inhibited the production of neurocan from activated astrocytes in vitro. In addition, IFN-γ treatment enhanced the number of serotonin-positive nerve fibers and myelinated nerve fibers around the lesion epicenter. We also found that glial cell line-derived neurotrophic factor (GDNF) and insulin-like growth factor-1 (IGF-1) were upregulated post-SCI following IFN-γ treatment. Our results indicate that IFN-γ exhibits therapeutic effects in mouse contusive SCI, presumably by reducing CSPG expression from reactive astrocytes and increasing the expression of neurotrophic factors.