OBJECTIVE A significant proportion of the more than 50 million people worldwide currently suffering with epilepsy are resistant to antiepileptic drugs (AEDs). As an alternative to AEDs, novel therapies based on cell transplantation offer an opportunity for long-lasting modification of epileptic circuits. To develop such a treatment requires careful preclinical studies in a chronic epilepsy model featuring unprovoked seizures, hippocampal histopathology, and behavioral comorbidities. METHODS Transplantation of progenitor cells from embryonic medial or caudal ganglionic eminence (MGE, CGE) were made in a well-characterized mouse model of status epilepticus-induced epilepsy (systemic pilocarpine). Behavioral testing (handling and open field), continuous video-electroencephalographic (vEEG) monitoring, and slice electrophysiology outcomes were obtained up to 270 days after transplantation (DAT). Post-hoc immunohistochemistry was used to confirm cell identity. RESULTS MGE progenitors transplanted into the hippocampus of epileptic mice rescued handling and open field deficits starting at 60 DAT. In these same mice, an 84% to 88% reduction in seizure activity was observed between 180 and 210 DAT. Inhibitory postsynaptic current frequency, measured on pyramidal neurons in acute hippocampal slices at 270 DAT, was reduced in epileptic mice but restored to naïve levels in epileptic mice receiving MGE transplants. No reduction in seizure activity was observed in epileptic mice receiving intrahippocampal CGE progenitors. CONCLUSIONS Our findings demonstrate that transplanted MGE progenitors enhance functional GABA-mediated inhibition, reduce spontaneous seizure frequency, and rescue behavioral deficits in a chronic epileptic animal model more than 6 months after treatment. Ann Neurol 2017;82:530-542.