Mesenchymal stem cell (MSC)-based regenerative medicine is widely considered as a promising approach for repairing tissue and re-establishing function in spinal cord injury (SCI). However, low survival rate, uncontrollable migration, and differentiation of stem cells after implantation represent major challenges toward the clinical deployment of this approach. In this study, we fabricated three-dimensional MSC-laden microfibers via electrospinning in a rotating cell culture to mimic nerve tissue, control stem cell behavior, and promote integration with the host tissue. The hierarchically aligned fibrin hydrogel was used as the MSC carrier though a rotating method and the aligned fiber structure induced the MSC-aligned adhesion on the surface of the hydrogel to form microscale cell fibers. The MSC-laden microfiber implantation enhanced the donor MSC neural differentiation, encouraged the migration of host neurons into the injury gap and significantly promoted nerve fiber regeneration across the injury site. Abundant GAP-43- and NF-positive nerve fibers were observed to regenerate in the caudal, rostral, and middle sites of the injury position 8 weeks after the surgery. The NF fiber density reached to 29 ± 6 per 0.25 mm2 at the middle site, 82 ± 13 per 0.25 mm2 at the adjacent caudal site, and 70 ± 23 at the adjacent rostral site. Similarly, motor axons labeled with 5-hydroxytryptamine were significantly regenerated in the injury gap, which was 122 ± 22 at the middle injury site that was beneficial for motor function recovery. Most remarkably, the transplantation of MSC-laden microfibers significantly improved electrophysiological expression and re-established limb motor function. These findings highlight the combination of MSCs with microhydrogel fibers, the use of which may become a promising method for MSC implantation and SCI repair.