Spinal cord injury (SCI) is a common outcome of traffic accidents and trauma with severe consequences. There has been no cure for such a condition. We performed experiments to evaluate the feasibility of implanting a chitosan tube filled with semifluid type I collagen into the site of surgically induced SCI to facilitate functional recovery. After a segment of the spinal cord, 4mm in length and 2/3 of the spinal cord across its width, at the ninth thoracic level of an adult rat was dissected and removed, the biodegradable chitosan tube was implanted into the lesioned site. One year later, we found that axons from the proximal spinal cord regenerated, traversed the dissected area inside the tube and reentered the distal spinal cord, leading to functional restoration of the essentially paralyzed hind limbs. The nerve regeneration and functional recovery were confirmed by immunohistochemistry, electron microscopy, nerve tracing and Basso-Beattie-Bresnahan behavioral evaluation. Such beneficial outcomes were not observed in the control groups, in which either no tube was implanted or the implanted tube had no collagen filling. We conclude that the newly designed tube implant promotes both axon regeneration and functional recovery following SCI. A similar approach may have clinical implications in humans.