Many investigators have recently used genetically modified primary fibroblasts of fibroblast cell lines (e.g., 3T3, 208F, or BHK cells) to deliver recombinant nerve growth factor (NGF) into the CNS. In the current study, SCT-1 cells, a Schwannoma cell line derived from a transgenic mouse, were transfected with a human NGF (hNGF) cDNA. After selection, these cells were encased within a polymer capsule and implanted into the ventricles of fimbria-fornix lesioned rats. Encapsulated, non-transfected cells served as controls. Results demonstrated that the hNGF transgene is expressed for at least 3 weeks after implantation. Moreover, the cells did not overgrow the capsule. Recombinant hNGF was able to save > 70% of lesioned cholinergic neurons, as assessed by NGF-receptor (NGFr) and choline acetyltransferase (ChAT) immunohistochemistry, from cell death. The number of cholinergic neurons in animals that received control capsules (i.e., nontransfected SCT-1 cells) was similar to lesion only animals (i.e., approximately 27% and approximately 33% for NGFr- and ChAT-positive neurons, respectively. These results show that SCT-1 cells can be used to deliver biologically active hNGF into the lesioned rat brain.