Background: Human induced pluripotent stem cell-derived neural stem cells (hiPS-NSCs) represent an exciting therapeutic approach for traumatically spinal cord injury (SCI). Unfortunately, most patients are the in chronic injury phase where a dense perilesional chondroitin sulfate proteoglycan (CSPG) scar significantly hinders regeneration. CSPG-degrading enzymes can enhance NSC-mediated recovery, however, nonspecific intrathecal administration causes off-target effects. We aimed to genetically engineer hiPS-NSCs to express a scar-degrading ENZYME into their local environment to enhance functional recovery. Methods: A bicistronic scar-degrading ENZYME and RFP reporter vector was non-virally integrated into hiPS-NSCs and monoclonalized. ENZYME activity was assessed by WST-1 and DMMB biochemical assays and an in vitro CSPG spot assay with hiPS-NSC-derived neurons. To assess in vivo efficacy, T-cell deficient rats (N=60) with chronic (8wk) C6-7 SCIs were randomized to receive (1)SMaRT cells, (2)hiPS-NSCs, (3)vehicle, or (4)sham surgery. Results: SMaRT cells retained key hiPS-NSC characteristics while stably expressing ENZYME. The expressed ENZYME could appropriately degrade in vitro and ex vivo CSPGs. While blinded neurobehavioural and immunohistochemical assessments are ongoing at 40wks post-injury, an interim analysis demonstrated human cells extending remarkably long (≥20,000µm) axons along host white matter tracts. Conclusions: This work provides exciting proof-of-concept data that genetically-engineered SMaRT cells can degrade CSPGs and human NSCs can extend long-distance processes in chronic SCI.