We analyzed the effect of late intensive inpatient rehabilitation on the functional outcome of patients with subcortical hemorrhagic stroke. Patients who were nonambulatory with hemorrhagic stroke in the internal capsule and putamen (n=55), the thalamus (n=24), or all 3 regions (n=15) underwent intensive inpatient rehabilitation. Patients with surgical intervention or an episode of ventricular hemorrhage were excluded. Lesion location was evaluated by MRI 4 months after the ictus. Demographic data, initial disability, and impairment measures were comparable in the 3 groups. Functional outcome demonstrated significant differences in mobility subscores (P<0.05) of the Functional Independence Measure such that patients with injury in the 3 regions were more likely to ambulate independently than were patients in the other groups. Lesion location data demonstrated that the ventral anterior nucleus of the thalamus was always spared; the ventral posterior (lateral and medial) nucleus was always damaged, and the ventral lateral nucleus was frequently damaged. Putaminal damage always included the postcommissural area. In addition, the entire posterior half limb of the internal capsule was always damaged. Subcortical lesions to multiple structures in the basal ganglia-thalamocortical motor circuits permitted enhanced motor recovery. Lesion location predicted the level of independent ambulation and the rate of recovery in patients with stroke who were nonambulatory before neurorehabilitation therapy.