We demonstrate that tissue plasminogen activator (tPA) and its inhibitors contribute to neurite outgrowth in the central nervous system (CNS) after treatment of stroke with multipotent mesenchymal stromal cells (MSCs). In vivo, administration of MSCs to mice subjected to middle cerebral artery occlusion (MCAo) significantly increased activation of tPA and downregulated PAI-1 levels in the ischemic boundary zone (IBZ) compared with control PBS treated mice, concurrently with increases of myelinated axons and synaptophysin. In vitro, MSCs significantly increased tPA levels and concomitantly reduced plasminogen activator inhibitor 1 (PAI-1) expression in astrocytes under normal and oxygen and glucose deprivation (OGD) conditions. ELISA analysis of conditioned medium revealed that MSCs stimulated astrocytes to secrete tPA. When primary cortical neurons were cultured in the conditioned medium from MSC co-cultured astrocytes, these neurons exhibited a significant increase in neurite outgrowth compared to conditioned medium from astrocytes alone. Blockage of tPA with a neutralizing antibody or knock-down of tPA with siRNA significantly attenuated the effect of the conditioned medium on neurite outgrowth. Addition of recombinant human tPA into cortical neuronal cultures also substantially enhanced neurite outgrowth. Collectively, these in vivo and in vitro data suggest that the MSC mediated increased activation of tPA in astrocytes promotes neurite outgrowth after stroke.