The efficacy of stem cell-based therapy for neurological diseases depends highly on cell survival post-transplantation. One of the key factors affecting cell survival is the grafting procedure. The current study aims to determine whether needle insertion into intact rat spinal cords creates a hypoxic environment that is prone to lipid peroxidation damage upon reperfusion, and whether an antioxidant protects human neural stem cells (hNSCs) both in vitro and post-transplantation into rat spinal cords. We show here that a single needle injection creates a hypoxic environment within the rat spinal cord that peaks at approximately 12 hours before reperfusion occurs. Lipid peroxidation damage at the transplantation site is evident by 48 hours post-needle insertion. In an in vitro model, hypoxia-reperfusion results in apoptotic death of hNSCs. Pretreatment with the antioxidant, α-lipoic acid, protects hNSCs against hypoxia-reperfusion injury and oxidative stress–mediated cell death. Increasing glutathione, but not Akt signaling, contributes to the protective effect of lipoic acid. Pretreating hNSCs with lipoic acid also increases the cell survival rate 1 month post-transplantation. Further investigation is warranted to develop improved techniques to maximize the survival of transplanted stem cells.